UNITED STATES
 SECURITIES AND EXCHANGE
COMMISSION
 Washington, D.C.
20549
  Amendment
No. 3 to Form 10KSB
 (Mark
One)
  x
              ANNUAL REPORT UNDER SECTION 13
      OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
  1934
  For the fiscal year ended December
31, 2006
  o
              TRANSITION REPORT UNDER SECTION
      13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
  1934
  For the transition period from
___________ to ___________
  Commission file number
000-15893
  CHINA YINGXIA INTERNATIONAL,
INC.
 (Exact
name of registrant as specified in its charter)
  Florida
              65-0664961(State
      or other jurisdiction of incorporation or organization)
              (I.R.S.
      Employer Identification No.)Harbin Yingxia Industrial Co.,
      Ltd, No.300, Xidazhi Street Nangang, Harbin
      Heilongjiang
              F4
150001(Address
      of principal executive offices)
              (Zip
      Code)
 
 Registrant’s
      telephone number, including area code:
              86 451
      86310948
  c/o American Union Securities
      100 Wall Street 15th Floor New York, NY
              10005(Address
      of principal agent offices)
              (Zip
      Code)
 
 Agent’s
      telephone number, including area code:
              (212)
      232-0120
 
 Securities
      registered under Section 12(b) of the Exchange Act:Title
      of each class
              Name
      of each exchange on which registeredNone
              NoneSecurities
      registered under Section 12(g) of the Exchange Act:Common Stock, par value
      $.001(Title
      of class)
  Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes x No o
  Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. o
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o No x
 
 State
issuer’s revenues for its most recent fiscal year. $8,401,711
 
 Aggregate
market value of the voting and non-voting common stock held by non-affiliates of
the Company as of December 31, 2006: $14,680,348.
  Number of
shares of the registrant’s Common Stock outstanding as of March 30, 2007:
33,608,857.


1


TABLE OF CONTENTS








Part IItem
      1.
            Description
      of Business.
            3Item
      2.
            Description
      of Property.
            9Item
      3.
            Legal
      Proceedings.
            9Item
      4.
            Submission
      of Matters to a Vote of Security Holders.
            9Part II
            
            9Item
      5.
            Market
      for Common Equity and Related Stockholder Matters.
            9Item
      6.
            Management’s
      Discussion and Analysis or Plan of Operations.
            10Item
      7.
            Financial
      Statements.
            13Item
      8.
            Changes
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure.
            14Item
      8A.
            Controls
      and Procedures.
            14Item
      8B.
            Other
      Information.
            14Part III
            
            14Item
      9.
            Directors,
      Executive Officers, Promoters and Control Persons; Compliance with Section
      16(a) of the Exchange Act.
            14Item
      10.
            Executive
      Compensation.
            16Item
      11.
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.
            17Item
      12.
            Certain
      Relationships and Related Transactions.
            17Item
      13.
            Exhibits.
            18Item
      14.
            Principal
      Accountant Fees and Services.
            18Signatures
            
            19





2


Except as otherwise required by the
context, all references in this prospectus to "we", "us”, "our", “CYXI”, or
"Company" refer to the consolidated operations of China Yingxia International,
Inc., a Florida corporation, and its wholly owned
subsidiaries.




Forward-Looking Statements and
Associated Risks






The Private Securities Litigation
Reform Act of 1995 provides a "safe harbor" for certain forward-looking
statements. Some of the statements contained in this annual report of the
Company discuss future expectations, contain projections of our operations
or financial condition or state other forward-looking information. Some
statements contained in this annual report on Form 10-KSB that are not
historical facts (including without limitation statements to the effect that we
"believe," "expect," "anticipate," "plan," "intend," "foresee," or other similar
expressions) and are forward-looking statements. These forward-looking
statements are based on our current expectations and beliefs concerning future
developments and their potential effects on us. There can be no assurance that
future developments affecting us will be those anticipated by us. All comments
concerning our expectations for future revenue and operating results are based
on our forecasts of our plan of operation and do not include the potential
impact of any future acquisitions or operations. These forward-looking
statements involve significant risks and uncertainties (some of which are beyond
our control) and assumptions. Should one or more of these risks or uncertainties
materialize, or should any of our assumptions prove incorrect, actual results
may vary in material respects from those projected in the forward-looking
statements.




PART
I


Item 1. Description of
Business.


Business
Development





We were
incorporated in Florida on May 6,
1996, as RCA Trading Co. and changed our name to Agronix, Inc. on June 18, 2001.
From then until May 12, 2006, we operated our business through our wholly-owned
subsidiary American Waste Recovery, Inc. (“AWR”), which was in the business of
acquiring and developing technologies that convert organic wastes into
agricultural products such as growth substrates, organic fertilizer, soil
amendments and other value added agri-products, and developing a technology that
is used to recover chemical commodities from organic waste for a wide variety of
industries such as agriculture, food, oil and gas, paper, clothing and
pharmaceuticals.





On May
12, 2006, we acquired as our wholly-owned subsidiary Warner Nutraceutical
International, Inc., a Delaware corporation (“WNI”) operating its business
through its wholly-owned subsidiary Harbin Yingxia Industrial Group Co., Ltd.
(“Yingxia”), a People’s Republic of China company primarily engaged in the
development, production and sale of health food products such as soybean meals
and drinks, cactus based foods, rice products, and beauty cosmetics (the
“Reverse Merger”). Pursuant to the Agreement of Merger and Plan of
Reorganization dated May 10, 2006, we issued to WNI shareholders 54,811,475
shares of common stock, par value $0.001 per share, and 1,473,649.074 shares of
Class A Preferred Stock, par value $0.001 per share, of which each share was
convertible into five hundred (500) shares of common stock, in consideration for
a cash payment of $289,000 and all the outstanding shares of WNI. In connection
with the Reverse Merger, we appointed Yingxia Jiao as our Chairman, Chief
Executive Officer and Chief Financial Officer. After the closing, we had
outstanding 100,000,000 shares of Common Stock and 1,473,649.074 shares of Class
A Preferred Stock, of which each share was convertible into five hundred (500)
shares of common stock. On July 7, 2006, we changed our name to China Yingxia
International, Inc., and on July 21, 2006 we changed our stock symbol to CYXI,
effectuated a 24.9:1 reverse split of our capital stock and converted to common
stock all outstanding shares of Class A Preferred Stock. Since May 12, 2006, we
operate our business through Yingxia.





On
September 13, 2006, we sold to Brian Hauff, our former President and Director,
the entire equity interest in AWR for $180,000.





Our
Business





Overview and Business
Model




Through our
wholly-owned subsidiary Yingxia, we engage in the development, production, and
sale of health food products, including soybean meals and drinks, cactus based
foods, rice products, and beauty cosmetics. Sales within China comprise
approximately 99.5% of total revenue. Our sales in foreign nations represent
pilot programs that as of yet has not become full scale operations. 
Yingxia's health food products have a historical and cultural background. One
principal that runs through the over 6,000-year history of Chinese medicine is
"food and medicine come from a common source". For thousands of years, Chinese
people have been using selected foods to enhance health, cure diseases, and
achieve longevity. Recent western medical technology also confirms that many
Chinese medicines have various degrees of disease prevention and anti aging
effects


3




We have
established a business model that includes research, planting, production, deep
processing, storage, and sales, which allows us to control all aspects of the
business, including the technology content of the product, supply of raw
material, quality of production and management of customer
relationships.









Our Principal Products and
Services




Using raw
materials from agricultural crop bases located in the Heilongjiang province, our
products and services are divided into six (6) categories:
 
 §
            Personal
      care products. §
            Organic
      rice products. §
            NestleTMproducts. §
            Soybean-based
      foods and drinks, §
            Longgu
      golden millet and enriched products, and §
            Cactus-based
      powders and herbal supplements. 
 Personal Care
Products
 
 As the
income of the Chinese middle-class increases with the development of the Chinese
economy, the Company has begun to market these products to meet the growing
demands of its franchisees. These products range from air and water purifier
devices to bath and shower-head faucets.
 
 Air Purifiers
 
 Using
electrostatic precipitator, the air purifiers are used to eliminate bacteria,
mold, and spores in the air through with its electric field. Airbone particles
are charged and then trapped on oppositely charged collectors. The effectiveness
of the device is due to the electric field created. The product neutralizes
germs with its electrostatic field and the by-product ozone which is found
inside the units.
 
 Water
Purifiers
 
 The water
purifiers mount directly onto household faucets. These multiple stage water
filter provides water with reduced levels of microbiological impurities while
still leaving the beneficial fluoride in the water itself. .
 
 Organic Rice
Products
  Growth in
domestic demand for organic products has been driven by rising incomes urban
areas. The China
Green Food Development Center (“CGFDC”) is the agency that sets the organic
food standards. The CGFDC was established in November 1992, under the jurisdiction of
the Chinese Ministry of Agriculture.  In China,
the CDFDC awards two Standards: A and AA. The A standard does permit some use of
synthetic agricultural chemicals, while AA is more strigent, but still allows
the use of certain chemicals. The Company has been marketing both types of
organic rice products including the rice itself and prepared foods and meals.
 NestleTM Products


In 2006, the Company commenced
selling NestleTM products including chocolate, instant cereal meals, and coffee
through its wholly owned and proprietarily owned franchise retail
outlets.The Company has
executed a sales agent agreement with Nestle. According to the agreement, Nestle
sells Nestle products at wholesale to the Company. The Company then sells the
products at retail prices to its customers. Therefore, all profits from retail
sales of the product are earned by the Company.


Soybean Products





Nutritional
value of soybean:





§
            High
      protein content;


§
            High
      content of unsaturated fatty acid;


§
            High
      contents of lecithin, therefore soybean is often recommended as the ideal
      food to prevent and cure coronary heart disease, hypertension,
      arteriosclerosis, and etc;


§
            Zero
      cholesterol: it is the only food that has high protein and almost zero
      cholesterol;


§
            Rich
      in calcium;


§
            Rich
      in Vitamin B, especially Vitamin B2;
and


§
            High
      contents of phosphor, natrium, kalium and other
  minerals.





Our
soybean products include:





§
            Organic
      Soybean Milk,


§
            Instant
      Soybean Meal,


§
            Soybean
      Salad,


§
            Soybean
      Vegetable Meat,


§
            Soybean
      Chocolate.





Millet Products





Millet
contains multiple nutritional elements that are required by the human body. In
addition millet contains high percentages of carbohydrate, protein, Vitamin B,
and other minerals. It also contains protein amino acids, methionine and
tryptophan.





Our
millet products include:




4




§
            Refined
      Longgu Golden millet;


§
            Superfine
      Longgu Golden millet powder; and


§
            Functional
      MT millet-fruit-vegetable energy
bars.





Cactus Products





Because
of unique natural conditions, Mexico grows six hundred types of cactus, which
are used by local peoples as fruit, medicine, vegetable, and even dye. It is now
not only an indispensable vegetable crop for the Mexican people, it has also
become a stable crop in North America, Latin America, and even in Africa and
Europe.





In 1997,
the Chinese Ministry of Agriculture sent a trading group to Mexico, and decided
to import its cactus breed.




Cactus
contains a large number of nutritional elements that are beneficial to the human
body. It contains 18 types of amino acids, including malic acid, amber acid, and
a variety of microelements that are needed by the human body. Cactus helps to
prevent such diseases as obesity, hypertension, high blood fat, high blood
sugar, and other coronary heart disease. It also helps to relieve stress and
depression caused by the fast paced modern life style. Mexico, where cactus has
been a staple food crop for over 200 years, has the lowest incidence rates of
cancer diseases according to the WHO.


Cactus
has strong adaptability, and has a long fruiting period. Thus, growing cactus
can achieve low costs and high returns.





Our
cactus products include:





§
            Super
      micro cactus dry powder;


§
            Cactus
      prescribed liquid;


§
            Cactus
      anti-inflammation tablets;


§
            Cactus
      nourishment tablets; and


§
            Cactus
      weight-loss products.





Market





With the
drastic increase of personal income and living standards in China, consumers are
becoming increasingly health conscious. It has also become a worldwide trend for
people to choose natural, ecologically friendly and nutritional food products
over other food products.





The
Chinese health food industry started in the 1980’s, with over a thousand
different types of health food and manufacturers, and total annual sales
reaching $250 million. By 1990, there were about 2,000 types of products, over
2,000 manufacturers, and annual sales reaching $1.2 billion. In 1994, there were
4,000 types of products, and over 3,000 manufacturers.





Since
1998, the health food industry experienced unprecedented high growth. Sales of
health food were $2.5 billion in 2001, $5 billion in 2003, and predicted to
reach $12.5 billion by 2008.













5








Expenditure
on health products grew at an annual rate of 17%. According to the market
research company “Quatech China”, the size of Chinese health food market
exceeded $4.1 billion by the end of 2000, and is currently approaching $5
billion. By 2009, market size is expected to reach $12.4 billion.











Characteristics of Chinese Health
Food Market





1.
            Companies are
      small:





Currently
there are over 3,000 health food companies in China with total annual production
over $6.2 billion. 1.45% of these companies have capital over $12.5 million, 38%
are mid-sized companies with capital between $6.2 and $12.5 million, 48.05% with
capital between $12,500 and $6.2 million and the remaining 12.5% are workshop
style companies with capital less than $12,500. These statistics show that the
majority of Chinese health food manufacturers are small to mid sized companies.
The Company has a comparative advantage in capital and scale compare to other
health food companies.





2.
            Research and Development
      (R&D) expenditures are low:




Traditionally
there have not been many advances in technology in the Chinese fast food market.
Currently R&D expenditure only account for 5.8% ($488,404)of the total sales
revenues.. In general, the companies lack the competitive advantage in
technology present in the international market.


Yingxia
has gathered strong technology resources in product R&D, and uses advanced
processing technology in production. Yingxia has become a modern enterprise that
develops high tech and high functional health food.





3.
            Marketing focus from product
      sales to health consulting:





Health
food sales have been transitioning from simple product sale to health
consulting. Yingxia has developed a business model in which its sales force will
act as consultants to customers.





Distribution Methods of the Products
and Services




The
Company sells its products through the use of franchise stores and regional
distribution centers. Franchise stores are categorized as flagship stores and
retail outlets. Flagship stores are defined as large standalone stores located
in larger metropolitan cities. Retail outlets are defined as smaller stores
within department stores or shopping malls. The regional distribution centers
are primarily used to market products in addition to generating sales.
Demonstrations are performed and one on one explanation of the products and the
usage is available on a daily basis.
  Our
franchisees are simply individuals who sell our products. There is no franchisee
fee or term of service associated with becoming a franchisee. These individuals
do need to apply to become a franchisee. By reviewing their entrepreneurial
history and track record, we grant these individuals the ability to sell our
products. Therefore, we classify these individuals as franchisees as compared to
simple distributors.
 
 As of
December 31, 2006, the Company sold products through a total of 18 franchises
which serve as distribution centers for the independently owned franchises, 42
flagship stores, and 440 retail outlets. The 482 total flagship stores and
retail outlets are independently owned by our franchisees.  The
Company’s distribution centers are wholly-owned by the Company and are an
integral part of the Company’s operations. The distribution center is used as
the physical distribution drop-off point for the company’s products to the
company’s franchisees. The distribution centers report directly to the Company
for instructions and guidance related to the demonstration and displays of
products. The Company acts as a wholesale retailer and sells directly to both
the distribution centers and franchise stores. However, as the franchise stores
are spread out throughout the country, the distribution centers are the main
sources for servicing and maintaining inventory for the franchise stores. After
these products are purchased, the independent retailers hold title to the
products. Therefore, the Company recognizes sales when its franchisees pay cash
to acquire products.


6




Competition





The
Chinese nutritional foods market was estimated to be approximately $5 billion
dollars in the year 2003. The Company estimates that by the end of 2006, the
market has grown by roughly $9 billion and forecasts continued growth of $12.5
billion by 2009. The industry on a whole is fragmented and primarily consists of
small to mid sized firms. With thousands of manufacturers and even more types of
products, no single company controls a 10% market share for the country. Within
provinces and cities, market shares are more concentrated, but still divided
among numerous firms. The Company through networks and contacts developed over
decades of doing business in the Harbin region, has gained wide acclaim and
brand loyalty. The Company enjoys competitive advantages of operations size and
manufacturing capacity. More 60% all firms in the industry are small
workshop-type operations with total net assets of less than $5 million dollars.




While,
only about 1.45% of the firms are comparable to the Company with net assets
which exceed $15 million dollars. To compete in a fragmented market, the Company
has engaged in various modes of promotion and marketing of its products. It has
used mainstream media channels consisting of advertisements in newspapers,
consumer and industry magazines, and television demonstration and information
shows.





Sources and Availability of Raw
Materials





Yingxia
has fully taken advantage of the valuable agriculture environment of the
Heilongjiang province, which produces 40% of the soybeans in China. The province
has an annual soybean output of over 5 million tons. Heilongjiang has 36 million
acres of “black soil” which enriched with nutrients and nitrogen compounds not
found in other regions of China. The “black soil” allows for the higher quality
harvest of millet and wheat. We plant
and harvest the raw materials on our facilities. In addition, the Company also
purchases raw materials from local farmers. Since the raw materials are bought
from the farmers on an individual basis, there is no reliance on a single entity
or group for the Company’s raw materials.





Dependence on One or a Few
Customers





We do not
depend on one or a few customers. Our customer base is a wide distribution of
clients which include regional distribution centers, franchise stores, and sales
agents. No single customer represents 5% or more of our revenues.





Our
health food products have a large potential market in China, due to the large
number of potential consumers.





The
Company’s target consumer bases are:





1.
            Patients of diabetic, high
      blood pressure, arteriosclerosis and other diseases:
      in China, there are 60 million patients suffering from diabetic and 120
      million from high blood pressure. Due to the stressful lifestyle and
      environmental pollution, 75% of the Chinese population is in sub-healthy
      condition (a status between healthy and unhealthy), most of whom are white
      collar workers.





2.
            Seniors:
      there are 300 million seniors in China, and likely to exceed 400 million
      by 2050. 66% of these seniors, which account for 20.8% of the Chinese
      population, have one or more types of diseases. Yingxia’s products are
      anti-aging, anti-tumor, and can diminish inflammation for these seniors
      needing nutritional health food
options.





3.
            Children and
      women:
      parents are keen on buying health food for their children to help increase
      their immune systems. The products are also appealing to women for their
      benefits during child bearing periods, as well as their cosmetic and
      dieting benefits.





Development
Strategy





The
Company will focus on the development of new types of nutritional heath food
products. The Company also plans to purse product diversification by entering
industries such as cosmetics, biomedicine, chemicals and agriculture, in order
to diversify risks and increase returns on investment.





Sales and
Marketing





We will
engage in both direct and agent sales. Domestically, sales and marketing will
focus on more developed, coastal cities where dispensable income is high; these
areas are the Bohai region, the Yangtze River Delta region, and the Pearl River
Delta region. We currently market our products through a network of
approximately 500 wholly owned and franchised retail outlets. Approximately 440
stores are owned by franchisees.





7


Internationally,
we will strive first to enter less restricted trading countries such as
Southeast Asia, Russia, and the Middle East. We will then enter European Union,
North America, Japan, and Korea after obtaining trading
permissions.





We will
strive to promote our products and brand image, through television and radio
advertising, co-sponsoring health food conferences, and hosting a health seminar
on television. We also plan to develop E-commerce as soon as possible to quickly
respond to customer demand on the web.





Patents, trademarks, licenses,
franchises, concessions, royalty agreements, or labor
contracts.





We have
the following patent and trademark registrations, and copyrights, for our
products:





§
            Patent
      on the manufacturing method for general nutritional supplements:


Chinese
patent no.: ZL 01113870.X.


Granted
August 4, 2004; good for 20 years





§
            Patent
      for cactus based nutritional drinks:


Chinese
patent no.: ZL 01113871.8


Granted
6/2/04; good for 20 years





§
            Patent
      on the manufacturing method for weight loss supplements:


Chinese
patent no.: ZL01113869.6


Granted
11/3/04: good for 20 years





§
            Trademarks
      on China Yingxia including logos and use of name.





§
            Copyrights
      on product brand names.





Need for Government Approval of
Principal Products or Services





Since the
Company’s products are marketed as nutritional supplements sold as foods and not
medicines, the government regulation is minimal towards the approval to market
and sell the products. The Company sells some of its products including the
Longgu millet and soybean based products under the “Green Food” label. This
label is approved by the State Farming Department to represent products of low
pesticide residue and integrated pest management systems. The “Green Food” label
is a distinction recognizing the Company’s products. The label is not required
to gain approval to manufacture or sell the products.





Effect of Existing or Probable
Government Regulations on Business





The
Company does not foresee any government regulation to interfere or affect the
course of operations in the near and immediate future.




Research and
Development


The
Company has internal research and development capabilities. The Company
developed the Cactus dry powder and deep process technology, Longgu golden rice
and deep process technology, and MT corn, fruit and vegetable functional food
processing technology. The Company owns all of the intellectual property
rights.


The
Company also partners with Australian KING International Co., Ltd, which owns a
patent in a leading soybean deep processing technology. The Company maintains
close cooperative relationship with research resource at such institutions as
Northeastern Agricultural University, Harbin Medical University, Heilongjiang
Traditional Chinese Medicine and Pharmacology University. The Company will
continue to leverage its technology advantage in Chinese medicine R&D and
its research resource at its Post Doctorial Station, increase technology
investment, and develop functional health food products with the concept of
“Food and medicine from common source”, and will protect its R&D results
with registered patents.





8


Notwithstanding
the aforesaid, the Company has spent $488,404 and $0 on R&D expenditures for
the years ended December 31, 2006 and 2005 respectively.




Cost and Effects of Compliance with
Environmental Laws





Through
the course of its operating history, the Company has complied with all
environmental regulations. These laws on a whole do not have a material effect
on the Company’s operations.




Employees





As of
December 31, 2006, we had 180 employees, 8 of which are officers, and 24 of
which are in scientific research.




Item 2. Description of
Property.
  The
Company’s wholly owned facilities include office space, store fronts, storage
areas, manufacturing space, and workshops totaling 54,600 square meters
located in
Harbin, Heilongjiang province of North China. For manufacturing purposes, there
is 16,300 square meters of space which include workshops dedicated to soybean
process, millet process and cactus process, and other facilities. Our facilities
have the capacity to manufacture 60,000 tons of soybean, 90,000 tons of millet,
and 1,500 tons of cactus powder annually.


Item 3. Legal
Proceedings.


Neither
the Company nor any of its subsidiaries is a party to any pending or threatened
legal proceedings.




Item
4. Submission of Matters to a Vote of
Security Holders.




There
were no matters submitted to a vote of security holders in the fourth quarter of
the fiscal year ended December 31, 2006.




PART
II




Item
5. Market for Common Equity and Related
Stockholder Matters.






Market
Information





Our
Common Stock is currently quoted on the OTCBB under the symbol “CYXI”. There is
a limited trading market for our Common Stock. The following table sets forth
the range of high and low bid quotations for each quarter within the last two
fiscal years and the subsequent interim period. These quotations as reported by
the OTCBB reflect inter-dealer prices without retail mark-up, mark-down, or
commissions and may not necessarily represent actual transactions.




Closing
    BidYEAR
2005
            High Bid
            Low
  Bid1stQuarter Ended March 31
            $0.053
            $0.0212ndQuarter Ended June 30
            $0.044
            $0.0103rdQuarter Ended September 30
            $0.1125
            $0.0214thQuarter Ended December 31
            $0.075
            $0.035YEAR
2006
            High Bid
            Low
  Bid1stQuarter Ended March 31
            $0.090
            $0.0362ndQuarter Ended June 30
            $0.095
            $0.0503rdQuarter Ended September 30
            $2.020
            $0.0614thQuarter Ended December 31
            $2.000
            $1.020YEAR
2007
            High Bid
            Low
  BidPeriod
      Ended March 9
            $2.150
            $1.740






9





Holders




As of
March 30, 2007 in accordance with our transfer agent records, we had 235 record
holders of our Common Stock, holding 33,608,857 shares.
  Dividends
  Holders of
our common stock are entitled to receive dividends if, as and when declared by
the Board of Directors out of funds legally available therefore. Although we
paid dividends on our common stock in 2005 when we were a private company, We do
not anticipate declaring any further dividends in the foreseeable future. We
intend to retain any future earnings for use in the operation and expansion of
our business. Consequently, we do not anticipate paying any cash dividends on
our common stock to our stockholders for the foreseeable future.


As the
Company has already obtained its Wholly Foreign Owned Entity (WOFE) certificate,
it is not regulated by the government restrictions related to the free movement
of the Chinese currency.  Therefore, the Company is not restricted in
moving funds out of China to pay dividends. However, as the Company foresees
using future earnings for working capital and expansion of its business, it does
not anticipate the payment of cash dividends in the near future.


Recent Sales of Unregistered
Securities





Except as
previously disclosed in our quarterly reports on Form 10-QSB and current reports
on Form 8-K, we did not sell or issue any shares of stock during the fourth
quarter of 2006.





Equity Compensation Plan
Information


None .





Item 6.
            Management’s Discussion and
      Analysis or Plan of
Operations.





The following discussion should be
read in conjunction with the Consolidated Financial Statements and Notes thereto
appearing elsewhere in this Form 10-KSB. The following discussion contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to
future events or our future performance. Actual results may materially differ
from those projected in the forward-looking statements as a result of certain
risks and uncertainties set forth in this prospectus. Although management
believes that the assumptions made and expectations reflected in the
forward-looking statements are reasonable, there is no assurance that the
underlying assumptions will, in fact, prove to be correct or that actual results
will not be different from expectations expressed in this
report.





Results of
Operations





For the Fiscal Year Ended December
31, 2006 as Compared to the Fiscal Year Ended December 31,
2005





The
following table sets forth the amounts and the percentage relationship to
revenues of certain items in our consolidated statements of income for the years
ended December 31, 2006 and 2005:




10





2006
            
            2005Revenues
            
            $
            8,401,711
            
            $
            6,184,469Cost
      of Goods Sold
            
            
            3,835,017
            
            
            3,002,989Gross
      Profit
            
            
            4,566,694
            
            
            3,181,480Operating
      ExpensesSelling,
      general and administrative
            
            
            1,739,221
            
            
            422,318Research
      & Development
            
            
            488,404Income
      before other Income and (Expenses)
            
            
            2,339,069
            
            
            2,759,162Other
      Income and (Expenses)Economic
      development grant
            
            
            -
            
            
            24,413Interest
      income
            
            
            431
            
            
            316Other
      income
            
            
            138
            
            
            122Interest
      expense
            
            
            -
            
            
            (4,754
            )Other
      expense
            
            
            (176
            )
            
            (45,407
            )Total
      other income and (expenses)
            
            
            393
            
            
            (25,310
            )Income
      Before Income Taxes (Benefit)
            
            
            2,339,462
            
            
            2,733,852Provision
      for Income Taxes (Benefit)
            
            
            (3,000,795
            )
            
            893,907Net
      Income
            
            
            5,340,257
            
            
            1,839,945Other
      Comprehensive Income:Foreign
      currency translation adjustment
            
            
            568,889
            
            
            357,365Comprehensive
      Income
            
            $
            5,909,146
            
            $
            2,197,310





Revenues





Revenues
for the year ended 2006 were $8,401,711, an increase of 35.85% or $2,217,242
over revenues for the year ended 2005. The increase in revenues is primarily due
to the introduction of the following new products: organic rice products, Nestle
products, and assorted personal care products. 56% of increase in revenue stems
from the nutritional foods including the organic rice products and the mix of
Nestle products including chocolate, coffee, and instant cereal meals. The
remaining 44% of revenue increase is attributed to our personal care products
including air and water purifiers, and shower heads. In total, the total number
of products we sell through our wholly owned retail outlets and franchisee owned
outlets increased from 82 in 2005 to 186 in 2006.





Cost of Goods Sold and Gross
Profit




Cost of goods
sold was $3,835,017 for the year ended December 31, 2006, compared to $3,002,989
for the year ended December 31, 2005. As a percentage of revenues, cost of goods
sold was 45.65% for the year ended December 31, 2006, compared to 48.56% for the
year ended December 31, 2005. We were able to lower cost of goods sold as a
percentage of revenues as a result of our introduction of a new mix of products
with lower costs of associated with the raw materials and cost of
production.
  Our gross
profit for the year ended December 31, 2006 was $4,566,694, as compared to
$3,181,480 for the same period in 2005. Gross margins increased to 54.35% in
2006 compared to 51.44% in 2005 as a result of the increase in new products.
Despite strategically discounting the prices of new products to our franchisees
in an effort to gain consumer recognition, we were able to recognize a
$1,385,214 increase or 2.91% increase year on year in gross profit. This is
significant to the Company and is wholly attributable to the higher margins of
our new product mix.
  Selling and General Administrative
Expenses, and R&D
 
 Selling and
general administrative expenses increased from $422,318 in the year ended
December 31, 2005 to $1,739,221 in the year of 2006, representing a 311.82%
increase. We incurred a one-time expense of $850,000 in going public through a
reverse merger in 2006. Excluding this one-time expense, our operational selling
and general administrative expenses totaled $889,221or an increase $466,903or
110.55% year on year. This increase in selling and general administrative is
attributed to our increase in sales of 35.85% year on year. In addition, with
the introduction of the new product mix, we started a marketing campaign focused
heavily on media advertising which in turn resulted in higher advertising costs.
Lastly, research and development expenses totaled $488,404. This ramp up in
R&D expenditures is a necessary step in securing the future of our
internally developed products.




Other Comprehensive Income





Other
Comprehensive income increased to $568,889, or 59.19% in the year ended December
31, 2006 compared to the year ended December 31, 2005 of $357,365. This increase
is completely due to the foreign currency translation adjustment.





Income Taxes





The
Company is governed by the Income Tax Law of the People’s Republic of China
concerning the private-run enterprises, which are generally subject to tax at a
statutory rate of 33% (30% state income tax plus 3% local income tax) on income
reported in the statutory financial statements after appropriated tax
adjustments. In 2006, the Company has obtained its foreign-owned entity (“WOFE”)
status upon completion of the reverse acquisition.





11


According
to the Provisional Regulations of the People ’ s Republic of China on Income
Tax, the Document
of Reductions and Exemptions of Income Tax for the Company has been approved by
the local tax bureau and the Management Regulation of Harbin Economic and
Technological Development Zone for the reporting period. The Company was granted
the status of WOFE and therefore is exempt from income tax from January 1, 2004
through December 31, 2007. The Company has also been approved to have its tax
rate reduced by 50% from January 1, 2008 to December 31, 2010.





The
Company has recognized the previously accrued income taxes in the amount of
$3,000,795 as income tax benefits in the Statement of Income for the year ended
December 31, 2006.





Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA)


Our EBITDA
for the year ended December 31, 2006 totaled $2,339,462, a decrease of 14.43%
from $2,733,852 for the year ended December 31, 2005. The decrease is primarily
due to one time $850,000 going public expense as part of our general and
administrative expenses. Excluding the costs associated with going public,
EBITDA for the year ended December 31, 2006 totaled $3,189,069, representing a
15.58% increase compared to the year ended December 31, 2005. This increase is
relatively lower compared to our 35.85% increase in revenues to the heavy
discounting of new products in an effort to gain market awareness and
acceptance. In addition, our R&D expenses increased to $488,404 compared to
$0 in 2005. Although this R&D expense lowered our EBITDA, it has set the
foundation for securing the Company's internal product development.




Net Income





Our net
income for the year ended December 31, 2006 totaled $5,340,257, an increase of
190.24% from $1,839,945 for the year ended December 31, 2005. The increase is
primarily due to the income tax benefit we received as a result of achieving
WOFE status. The tax benefit represented $3,000,795 or 53.52% of our total net
income.





Liquidity and Capital
Resources





Cash





Our cash
and cash equivalents balance at December 31, 2006, was $77,867, representing an increase
of $42,964, or 123%, compared with our cash balance of $ 34,903 at December 31,
2005. The increase was mainly attributable to the increase in our collection of
account receivables and other receivables.





Cash Flow 2006 Compared to
2005





Cash flows
from operations during 2006 amounted to $8,424,577representing an increase of
approximately 217.81% compared with cash flows from operations of $2,650,824 in
2005. The increased cash flow was due primarily to the increase of our net
income by 190.24%, to $5,340,257 in the year of 2006, compared with net income
of $1,839,945 in the year of 2005. The increased cash flow was also due in part
to a decrease in advances to suppliers by $3,510,157 during 2006, due to our
better control over payment to our suppliers. These increases were partly offset
by a decrease in our accounts payable of $150,335 and increases in our
inventories of $929,194 during 2006, which resulted from our expanded scale of
operations, which required support of increased sales and production activities
and additional demands on working capital.





Our cash
flows used in investing activities amounted to $8,800,779 in the year ended
December 31, 2006. We used $1,937,126 for the purchase of plant and equipment
including our soybean-based foods manufacturing facility. Compared to 2005, our
cash flows used in investing activities increased by $7,635,519, which is
attributed primarily to the purchase of property and equipment and the
construction in process which totaled $5,736,099.





Our cash
flows from financing activities amounted to $210,652 in the year of 2006
compared to $1,761,209 in 2005. Our sole financing activity was paying off a
note payable in the amount of $210,652 as compared to 2005 when we paid out
dividends to shareholders in the amount of $1,780,010.





Working Capital





Our working
capital increased by $3,582,493 or 1020.85% to $1,568,573 at December 31, 2006,
as compared to $350,934 at December 31, 2005, primarily due to our decrease of
taxes payable in the amount of $2,934,115 as a result of obtaining our
foreign-owned entity (“WOFE”)status upon completion of the reverse merger
acquisition and $2,764,599 in loans to related parties. All
related party loans are provided to the affiliated retail stores or companies to
facilitate the initial establishment of their businesses for selling the
company's products. As of the date of this report, $922,592 has been
collected and the remaining balance is expected to be fully repaid by the
end of the second quarter of 2007.





12


We currently
generate our cash flow through operations. We believe that our cash flow
generated from operations will be sufficient to sustain operations for at least
the next twelve months.





Currency Exchange
Fluctuations




All of
Company's revenues and majority of the expenses in 2006 were denominated
primarily in Renminbi ("RMB"), the currency of China, and was converted into US
dollars at the exchange rate of 7.944 to 1. In the third quarter of 2005, the
Renminbi began to rise against the US dollar. As a result of the appreciation of
RMB we recognized a foreign currency translation gain of $568,889. There could
be no assurance that RMB-to-U.S. dollar exchange rates will remain stable. A
devaluation of RMB relative to the U.S. dollar would adversely affect our
business, financial condition and results of operations. We do not engage in
currency hedging.




Contractual and Other
Obligations





The
Company has no long-term liabilities, or purchase commitments, operating leases,
or other capital commitments as of December 31, 2006.





Critical Accounting
Policies





Estimates Affecting Accounts
Receivable and Inventories





The
preparation of our consolidated financial statements requires management to make
estimates and assumptions that affect our reporting of assets and liabilities
(and contingent assets and liabilities). These estimates are particularly
significant where they affect the reported net realizable value of the Company's
accounts receivable and inventories.





Accounts Receivables





Accounts
receivables are stated at net realizable value. This value includes an
appropriate allowance for estimated uncollectible accounts. The allowance is
calculated based upon the evaluation and the level of past due accounts and the
relationship with and the economic status of the customers. An allowance for
doubtful accounts has been established in the amounts of $199,971 for the year
ended December 31, 2006.





Inventories




Policy Affecting Recognition of
Revenue





Among the
most important accounting policies affecting our consolidated financial
statements is our policy of recognizing revenue in accordance with the SEC's
Staff Accounting Bulletin ("SAB") No. 104. Under this policy, The Company
recognizes revenue on product sales when products are delivered and the title
passes to the customers and collection is reasonably assured.





Off-Balance Sheet
Arrangements





We do not
have any off-balance sheet arrangements, financings, or other relationships with
unconsolidated entities or other persons, also known as “special purpose
entities” (SPEs).




Item 7. Financial
Statements.


Our
financial statements begin on page F-1 below.







13




CHINA YINGXIA INTERNATIONAL,
INC.
 (FORMERLY AGRONIX,
INC.)
 
 FINANCIAL
STATEMENTS
  DECEMBER 31, 2006 AND
2005
 
 
  
   
 
 CHINA YINGXIA INTERNATIONAL,
INC.
 (FORMERLY AGRONIX,
INC.)
 
 INDEX TO CONSOLIDATED FINANCIAL
STATEMENTS
 
 
 Report
      of Independent Registered Public Accounting Firm
                  F-1Consolidated
      Balance Sheet at December 31, 2006
                  F-2Consolidated
      Statements of Income for the years ended December 31, 2006 and
      2005
                  F-3Consolidated
      Statements of Changes in Stockholders’ Equity for the years ended December
      31, 2006 and 2005
                  F-4Consolidated
      Statements of Cash Flows for the years ended December 31, 2006 and
      2005
                  F-5Notes
      to Consolidated Financial Statements
                  F-6
      - F-17
  
 REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
 
 
 
 The Board
of Directors and Stockholders
 China
Yingxia International, Inc. (Formerly Agronix, Inc.)
 Harbin,
PRC
  We have
audited the accompanying consolidated balance sheet of China Yingxia
International, Inc., as of December 31, 2006 and the related statements of
income, changes in stockholders’ equity, and cash flows for each of the two
years ended December 31, 2006 and 2005. These consolidated financial statements
are the responsibility of the Company’s management. Our responsibility is to
express an opinion on these financial statements based on our
audits.
 
 We
conducted our audits in accordance with standards established by the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
 
 In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of China Yingxia International,
Inc., as of December 31, 2006 and the results of its operations, changes in
stockholders’ equity, and cash flows for each of the two years then ended
December 31, 2006 and 2005 in conformity with accounting principles generally
accepted in the United States of America.
 
 
 Bagell Josephs, Levine & Company,
LLC
 
 Bagell
Josephs, Levine & Company, LLC
 Gibbsboro,
New Jersey
 
 
 March 14,
2007
 F-1
 CHINA YINGXIA INTERNATIONAL
INC.
 (FORMERLY AGRONIX,
INC.)
 CONSOLIDATED BALANCE
SHEET
 December 31, 2006
 ASSETS
 Current
      assets:Cash
      and cash equivalents
                  
                  $
                  77,867Accounts
      receivable - net of allowance for doubtful accounts of
      $199,971
                  
                  
                  1,315Inventory
                  
                  
                  1,112,102Prepaid
      expenses
                  
                  
                  95,479Other
      receivables
                  
                  
                  346,775Advances
      to suppliers
                  
                  
                  445,254Loans
      to related party
                  
                  
                  2,764,599Total
      Current Assets
                  
                  
                  4,843,391Property
      and equipment, net of accumulated depreciation of
    $2,381,268
                  
                  
                  14,990,594Other
      assets:Land
      use right, net
                  
                  
                  294,079Total
      Other Assets
                  
                  
                  294,079Total
      Assets
                  
                  $
                  20,128,064LIABILITIES AND STOCKHOLDERS'
      EQUITYCurrent
      liabilities:Accounts
      payable
                  
                  $
                  349,499Accrued
      expenses and other payables
                  
                  
                  560,465Total
      Current Liabilities
                  
                  
                  909,964Commitments
      and ContingenciesStockholders'
      Equity:Preferred
      stock, $0.001 par value, 10,000,000 shares authorized; - 0 -
      sharesoutstanding
      at December 31, 2006
                  
                  
                  -Common
      stock, $0.001 par value, 100,000,000 shares authorized;33,608,857
      shares issued and outstanding at December 31, 2006
                  
                  
                  33,609Additional
      paid-in capital
                  
                  
                  7,324,772Accumulated
      other comprehensive income
                  
                  
                  928,708Statutory
      reserves
                  
                  
                  901,463Retained
      earnings-unappropriated
                  
                  
                  10,029,548Total
      Stockholders' Equity
                  
                  
                  19,218,100Total
      Liabilities and Stockholders' Equity
                  
                  $
                  20,128,064
  See accompanying notes to the consolidated
financial statements.
  F-2
 CHINA YINGXIA INTERNATIONAL
INC.
 (FORMERLY AGRONIX,
INC.)
 CONSOLIDATED STATEMENTS OF
INCOME
 FOR THE YEARS ENDED DECEMBER
31,
 
 2006
                  
                  
                  2005Revenues
                  
                  $
                  8,401,711
                  
                  
                  $
                  6,184,469Cost
      of Goods Sold
                  
                  
                  3,835,017
                  
                  
                  
                  3,002,989Gross
      Profit
                  
                  
                  4,566,694
                  
                  
                  
                  3,181,480Operating
      ExpensesSelling,
      general and administrative
                  
                  
                  1,739,221
                  
                  
                  
                  422,318Research
      and development
                  
                  
                  488,404
                  
                  
                  
                  -Income
      before other Income and (Expenses)
                  
                  
                  2,339,069
                  
                  
                  
                  2,759,162Other
      Income and (Expenses)Economic
      development grant
                  
                  
                  -
                  
                  
                  
                  24,413Interest
      income
                  
                  
                  431
                  
                  
                  
                  316Other
      income
                  
                  
                  138
                  
                  
                  
                  122Interest
      expense
                  
                  
                  -
                  
                  
                  
                  (4,754
                  )Other
      expense
                  
                  
                  (176
                  )
                  
                  
                  (45,407
                  )Total
      other income and (expenses)
                  
                  
                  393
                  
                  
                  
                  (25,310
                  )Income
      Before Income Taxes (Benefit)
                  
                  
                  2,339,462
                  
                  
                  
                  2,733,852Provision
      for Income Taxes (Benefit)
                  
                  
                  (3,000,795
                  )
                  
                  
                  893,907Net
      Income
                  
                  
                  5,340,257
                  
                  
                  
                  1,839,945Other
      Comprehensive Income:Foreign
      currency translation adjustment
                  
                  
                  568,889
                  
                  
                  
                  357,365Comprehensive
      Income
                  
                  $
                  5,909,146
                  
                  
                  $
                  2,197,310Basic
      and diluted income per common share
                  
                  $
                  0.33
                  
                  
                  $
                  0.49Weighted
      average number of common shares
                  
                  
                  17,157,810
                  
                  
                  
                  3,735,066
  See accompanying notes to the consolidated financial statements.
  F-3
  CHINA YINGXIA INTERNATIONAL
INC.
 (FORMERLY AGRONIX,
INC.)
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
 FOR
THE YEARS ENDED DECEMBER 31, 2006 AND 2005
 Preferred
      Stock
                    
                    Common Stock
                    
                    
                    
                    
                    
                    
                    
                    
                    Accumulated
                      Other
                    
                    
                    
                    Retainedpar value
      $0.001
                    
                    par value
      $.001
                    
                    
                    Additional
                    
                    
                    Comprehensive
                    
                    
                    Statutory
                    
                    
                    
                    Earnings
    -
                    
                    
                    ComprehensiveShares
                    
                    
                    Amount
                    
                    Shares
                    
                    
                    Amount
                    
                    
                    Paid-in
      Capital
                    
                    
                    Income
                    
                    
                    Reserves
                    
                    Unappropriated
                    
                    
                    Income
                    
                    
                    TotalBalance,
      January 1, 2005
                    
                    
                    -
                    
                    
                    $
                    -
                    
                    
                    
                    
                    1,533,783
                    
                    
                    
                    1,534
                    
                    
                    
                    
                    
                    
                    7,337,936
                    
                    
                    
                    
                    
                    
                    2,454
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    $
                    5,530,819
                    
                    
                    
                    
                    
                    $
                    12,872,743Issuance
      of common stock
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    280,998
                    
                    
                    
                    281
                    
                    
                    
                    
                    
                    
                    (281
                    )
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    -Recapitalization
      on reverse acquision
                    
                    
                    59,183
                    
                    
                    
                    59
                    
                    
                    
                    
                    2,201,283
                    
                    
                    
                    2,201
                    
                    
                    
                    
                    
                    
                    (2,260
                    )
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    -Additional
      capital contributed
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    18,801
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    18,801Comprehensive
      incomeNet
      income
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    1,839,945
                    
                    
                    
                    1,839,945
                    
                    
                    
                    1,839,945Other
      comprehensive income, net of taxForeign
      currency translation adjustments
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    357,365
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    357,365
                    
                    
                    
                    357,365Comprehensive
      income
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    2,197,310Dividends
      paid on common stock
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    (1,780,010
                    )
                    
                    
                    
                    
                    
                    
                    (1,780,010
                    )Adjustment
      to statutory reserve
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    854,152
                    
                    
                    
                    
                    (854,152
                    )
                    
                    
                    
                    
                    
                    
                    -Balance,
      December 31, 2005
                    
                    
                    59,183
                    
                    
                    
                    59
                    
                    
                    
                    
                    4,016,064
                    
                    
                    $
                    4,016
                    
                    
                    
                    
                    
                    
                    $
                    7,354,196
                    
                    
                    
                    
                    
                    
                    $
                    359,819
                    
                    
                    
                    
                    
                    
                    $
                    854,152
                    
                    
                    
                    $
                    4,736,602
                    
                    
                    
                    
                    
                    
                    $
                    13,308,844Convervsion
      of Preferred Stock
                    
                    
                    (59,183
                    )
                    
                    
                    (59
                    )
                    
                    
                    
                    29,592,793
                    
                    
                    
                    29,593
                    
                    
                    
                    
                    
                    
                    
                    (29,424
                    )
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    110Additional
      capital contributed
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    -Comprehensive
      incomeNet
      income
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    5,340,257
                    
                    
                    
                    5,340,257
                    
                    
                    
                    5,340,257Other
      comprehensive income, net of taxForeign
      currency translation adjustments
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    568,889
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    568,889
                    
                    
                    
                    568,889Comprehensive
      income
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    5,909,146Adjustment
      to statutory reserve
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    47,311
                    
                    
                    
                    
                    (47,311
                    )
                    
                    
                    
                    
                    
                    
                    -Balance
      December 31, 2006
                    
                    
                    -
                    
                    
                    $
                    -
                    
                    #
                    
                    
                    33,608,857
                    
                    
                    $
                    33,609
                    
                    
                    
                    
                    
                    
                    $
                    7,324,772
                    
                    
                    
                    
                    
                    
                    $
                    928,708
                    
                    
                    
                    
                    
                    
                    $
                    901,463
                    
                    
                    
                    $
                    10,029,548
                    
                    
                    
                    
                    
                    
                    $
                    19,218,100
  See accompanying notes to the consolidated
financial statements.
 F-4
 CHINA YINGXIA INTERNATIONAL
INC.
 (FORMERLY AGRONIX,
INC.)
 CONSOLIDATED STATEMENTS OF CASH
FLOWS
 FOR THE YEARS ENDED DECEMBER
31,
 2006
                  
                  
                  
                  2005Cash
      Flows From Operating Activities:Net
      income
                  
                  
                  $
                  5,340,257
                  
                  
                  
                  $
                  1,839,945Adjustments
      to reconcile net income to net cashprovided
      by operating activities:Depreciation
      and amortization
                  
                  
                  
                  542,807
                  
                  
                  
                  
                  317,186Changes
      in operating assets and liabilities:Accounts
      receivable
                  
                  
                  
                  675,403
                  
                  
                  
                  
                  (589,724
                  )Inventory
                  
                  
                  
                  (929,194
                  )
                  
                  
                  
                  1,329,731Other
      receivable
                  
                  
                  
                  2,759,017
                  
                  
                  
                  
                  (276,038
                  )Advances
      to suppliers
                  
                  
                  
                  3,510,157
                  
                  
                  
                  
                  (2,139,587
                  )Prepaid
      expenses
                  
                  
                  
                  (91,457
                  )
                  
                  
                  
                  (4,022
                  )Accounts
      payable
                  
                  
                  
                  (150,335
                  )
                  
                  
                  
                  (83,410
                  )Taxes
      payable
                  
                  
                  
                  (2,934,115
                  )
                  
                  
                  
                  1,516,137Unearned
      revenue
                  
                  
                  
                  -
                  
                  
                  
                  
                  (56,185
                  )Accrued
      expenses and other payables
                  
                  
                  (297,963
                  )
                  
                  
                  
                  796,791Cash
      provided by operating activities
                  
                  
                  
                  8,424,577
                  
                  
                  
                  
                  2,650,824Cash
      Flows From Investing Activities:Purchase
      of property and equipment
                  
                  
                  
                  (1,937,126
                  )
                  
                  
                  
                  (508,368
                  )Purchase
      of land use right
                  
                  
                  
                  (300,081
                  )
                  
                  
                  
                  -Loan
      to related parties
                  
                  
                  
                  (2,764,599
                  )
                  
                  
                  
                  -Additions
      to construction in process
                  
                  
                  
                  (3,798,973
                  )
                  
                  
                  
                  (656,892
                  )Cash
      (used in) investing activities
                  
                  
                  
                  (8,800,779
                  )
                  
                  
                  
                  (1,165,260
                  )Cash
      Flows From Financing ActivitiesCapital
      contributions
                  
                  
                  
                  -
                  
                  
                  
                  
                  18,801Payment
      of note payable
                  
                  
                  
                  (210,652
                  )
                  
                  
                  
                  -Dividends
      paid
                  
                  
                  
                  -
                  
                  
                  
                  
                  (1,780,010
                  )Cash
      (used in) financing activities
                  
                  
                  
                  (210,652
                  )
                  
                  
                  
                  (1,761,209
                  )Effect
      of exchange rate changes on cash and cash equivalents
                  
                  
                  629,818
                  
                  
                  
                  
                  234,632Increase
      (Decrease) in cash and cash equivalents
                  
                  
                  42,964
                  
                  
                  
                  
                  (41,013
                  )Cash
      and Cash Equivalents - Beginning of year
                  
                  
                  34,903
                  
                  
                  
                  
                  75,916Cash
      and Cash Equivalents - Ending of year
                  
                  
                  $
                  77,867
                  
                  
                  
                  $
                  34,903Supplemental
      disclosures of cash flow informationDuring
      the year, cash was paid for the following:Interest
                  
                  
                  $
                  -
                  
                  
                  
                  $
                  4,754Taxes
                  
                  
                  $
                  -
                  
                  
                  
                  $
                  7,150
  See accompanying notes to the consolidated financial statements.
 F-5
 CHINA YINGXIA INTERNATIONAL
INC.
 (FORMERLY AGRONIX,
INC.)
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMER 31, 2006 AND
2005
  1. ORGANIZATION AND DESCRIPTION OF
BUSINESS
 
 China
Yingxia International, Inc. (the “Company” or “China Yingxia”) was incorporated
in the State of Florida on May 6, 1996 and formerly known as Agronix, Inc.
(“Agronix”).
  On May
12, 2006, the Company entered into a share exchange agreement with Warner
Nutraceutical International, Inc. (‘WNI”), which is the parent company to Harbin
Yingxia Business Group Co, Ltd. ("Yingxia"). Pursuant to the share exchange
agreement, the Company issued to WNI shareholders 54,811,475 shares of Common
Stock, par value $0.001 per share, and 1,473,649.074 shares of Class A Preferred
Stock, par value $0.001 per share, of which each share is convertible into five
hundred (500) shares of the Company’s Common Stock. As a result of the
transactions, there has been a change in control of the Company as the
shareholders of WNI became the majority shareholders of the Company.
   For
accounting purpose, the transaction has been accounted for as a reverse
acquisition under the purchase method. Accordingly, WNI and its subsidiary are
treated as the continuing entity for accounting purposes. Following the merger,
Agronix filed a Certificate of Amendment and changed its name to China Yingxia
International, Inc.
   On July
21, 2006, the Company’s board of directors approved a reverse stock spilt on
both common stock and preferred stock. Each 24.9 shares of the Company's Common
Stock and Class A Preferred Stock were converted into one (1) share of Common
Stock and one (1) share of Class A Preferred Stock, respectively.
Simultaneously, all of the preferred shares were converted into common shares at
ration of 1 to 500 and the preferred shares were cancelled. As of December 31,
2006, there are 33,608,857 shares of Common Stock outstanding and no Preferred
Stock.
   The
Company operates its business through its wholly-owned subsidiary Harbin Yingxia
Business Group, Ltd. (" Harbin Yingxia"), a joint stock corporation organized
and existing under the laws of the People's Republic of China (“PRC”) in 1998.
Harbin Yingxia is engaged in the development, manufacture and distribution of
organic nutritional food products and dietary supplements. Relying on the raw
materials produced in the soybean production base, green cactus production base
and organic millet production base, Yingxia produces and distributes hundreds of
serial products of high quality, high nutrition, and high added
value.
   F-6
 
 CHINA YINGXIA INTERNATIONAL
INC.
 (FORMERLY AGRONIX,
INC.)
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
 DECEMER 31, 2006
 
  
   2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
  Basis of
presentation
  The
Company’s consolidated financial statements have been prepared in accordance
with generally accepted accounting principles in the United States of America
(“US GAAP”). This basis of accounting differs in certain material respects from
that used for the preparation of the books of account of the Company’s principal
subsidiary, which are prepared in accordance with the accounting principles and
the relevant financial regulations applicable to enterprises with limited
liabilities established in the PRC, the accounting standards used in the places
of their domicile.  The accompanying consolidated financial statements
reflect necessary adjustments not recorded in the books of account of the
Company’s subsidiary to present them in conformity with US
GAAP.
  The
acquisition of WNI on May 12, 2006 has been accounted for as a purchase and
treated as a reverse acquisition which was described in Note 1 - Organization
and description of business.
  Principles of
consolidation
 
 The
consolidated financial statements of China Yingxia International, Inc. include
the accounts of the Company and its wholly owned subsidiaries, WNI and Harbin
Yingxia. All significant inter-company balances and transactions are eliminated
in consolidation.
 
 Use of estimates
 
 In
preparing the financial statements in conformity with accounting principles
generally accepted in the United States of America, management makes estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the dates of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting year. Significant estimates, required by management, include the
recoverability of long-lived assets and the valuation of inventories. Actual
results could differ from those estimates.
 
 Cash and cash
equivalents
 
 For
purposes of the statement of cash flow, the Company considers all highly liquid
investments with an original maturity of three months or less to be cash
equivalents.
 
 F-7
 
 CHINA YINGXIA INTERNATIONAL
INC.
 (FORMERLY AGRONIX,
INC.)
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
 DECEMER 31, 2006
 
 
 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
 
 Accounts Receivables
  Accounts
receivables are stated at net realizable value. This value includes an
appropriate allowance for estimated uncollectible accounts. The allowance is
calculated based upon the evaluation and the level of past due accounts and the
relationship with and the economic status of the customers.  An
allowance for doubtful accounts has been established in the amount of $191,971
for the year ended December 31, 2006. The Company does not maintain a large
balance of accounts receivable due to the nature of its business, and the
collections on the Company’s accounts receivable has been generally good. Except
for the above reserved allowance, the Company has not encountered any
uncollected accounts receivable.
  Inventories
 Inventories are valued at the lower of cost or market with cost
determined on a first-in first-out basis. As of December 31, 2006, our inventory
only included packing materials and finished goods. We did not have any works in
progress.
 Land
use right
  Right to
use land is stated at cost less accumulated amortization. Amortization is
provided using the straight-line method over 50 years. The amortization expense
for the year ended December 31, 2006 was $6,002.
 
 Property and
equipment
 
 Property
and equipment are stated at cost, net of accumulated depreciation. The cost of
the Cactus Seedlings is based on the appraised cost evaluated by an independent
appraisal firm in accordance with the applicable laws and regulations concerning
the property evaluation in the People’s Republic of China. Maintenance and
repairs are charged to expense as incurred.
 
 Depreciation
is computed using the straight-line method over the estimated useful lives of
5-10 years. The depreciable life for the Cactus Seedlings is estimated to be 10
years.
 
 Advance to suppliers
 
 Advance
to suppliers represent the payments made and recorded in advance for goods and
services. Advances were also made for the purchase of the materials and
equipment of the Company’s construction in progress. The final phase of the
construction is not completed. As such, no amortization was made for the years
ended December 31, 2006.
 
 F-8
 
 CHINA YINGXIA INTERNATIONAL
INC.
 (FORMERLY AGRONIX,
INC.)
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
 DECEMER 31, 2006
 
 
 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
  Impairment of long-lived assets
  Long-lived
assets, which include property, plant and equipment and intangible assets, are
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable.
  Recoverability
of long-lived assets to be held and used is measured by a comparison of the
carrying amount of an asset to the estimated undiscounted future cash flows
expected to be generated by the asset. If the carrying amount of an asset
exceeds its estimated undiscounted future cash flows, an impairment charge is
recognized by the amount by which the carrying amount of the asset exceeds the
fair value of the assets. Fair value is generally determined using the asset’s
expected future discounted cash flows or market value, if readily determinable.
  Income taxes
 
 The
Company accounts for income tax under the provisions of SFAS No.109 "Accounting
for Income Taxes", which requires recognition of deferred tax assets and
liabilities for the expected future tax consequences of the events that have
been included in the financial statements or tax returns. Deferred income taxes
are recognized for all significant temporary differences between tax and
financial statements bases of assets and liabilities. Valuation allowances are
established against net deferred tax assets when it is more likely than not that
some portion or all of the deferred tax asset will not be realized.
 
 The
Company does not have any long-term deferred tax assets or liabilities in China
that will exist once the tax holiday (See Note 8) expires. The Company does not
have any significant deferred tax asset or liabilities that relate to tax
jurisdictions not covered by the tax holiday.
 
 Revenue
recognition
  The
Company recognizes revenue on product sales when products are delivered and the
title passes to the customers and collection is reasonably assured.
  Cost of Revenues
  Cost of
revenues consists primarily of material costs, employee compensation,
depreciation and related expenses, which are directly attributable to the
production of products.  Write-down of inventory to lower of cost or market
is also recorded in cost of revenues
   F-9
 
 
 CHINA YINGXIA INTERNATIONAL
INC.
 (FORMERLY AGRONIX,
INC.)
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
 DECEMER 31, 2006
 
 
 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
 
 Concentration of credit
risk
 
 Financial
instruments that potentially subject the Company to concentration of credit risk
consist primarily of accounts receivable and other receivables. The Company does
not require collateral or other security to support these receivables. The
Company conducts periodic reviews of its clients' financial condition and
customer payment practices to minimize collection risk on accounts
receivable.
 
 The
operations of the Company are located in the PRC. Accordingly, the Company's
business, financial condition, and results of operations may be influenced by
the political, economic, and legal environments in the PRC, as well as by the
general state of the PRC economy.
 
 Fair value of financial
instruments
 
 The
carrying amounts of certain financial instruments, including cash and cash
equivalents, accounts receivable, other receivables, accounts payable, accrued
expenses, taxes payable, notes payable and other loans payable approximate fair
value due to the short-term nature of these items. The carrying amounts of bank
borrowings approximate the fair value based on the Company's expected borrowing
rate for debt with similar remaining maturities and comparable
risk.
 
 Foreign currency
translation
  The
Company’s functional currency is the Renminbi (“RMB”). For
financial reporting purposes, RMB has been translated into United States dollars
("USD") as the reporting currency. Assets and liabilities are translated at the
exchange rate in effect at the balance sheet date. Revenues and expenses are
translated at the average rate of exchange prevailing during the reporting
period. Translation adjustments arising from the use of different exchange rates
from period to period are included as a component of stockholders' equity as
"Accumulated other comprehensive income". Gains and losses resulting from
foreign currency transactions are included in accumulated other comprehensive
income. There is no significant fluctuation in exchange rate for the conversion
of RMB to USD after the balance sheet date.
 Research and
Development
 
 Research
and development costs are related primarily to the Company developing its
intellectual property. Research and development costs are expenses as
incurred.
  Start-up Costs
  In
accordance with the American Institute of Certified Public Accountants Statement
of Position 98-5, “Reporting on the Costs of Start-up Activities”, the Company
expenses all costs incurred in connection with the start-up and organization of
the Company.
  
 F-10
  CHINA YINGXIA INTERNATIONAL
INC.
 (FORMERLY AGRONIX,
INC.)
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
 DECEMER 31, 2006
 
 
 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
 
 Earnings per
share
 
 Basic
earnings per share are computed by dividing income available to common
shareholders by the weighted-average number of common shares outstanding during
the period. Diluted earnings per share is computed similar to basic earnings per
share except that the denominator is increased to include the number of
additional common shares that would have been outstanding if the potential
common shares had been issued and if the additional common shares were dilutive.
There are no common stock equivalents available for dilution purposes as of
December 31, 2006.
 
 New accounting
pronouncements
 
 In
February 2006, FASB issued SFAS No. 155, “ Accounting for Certain Hybrid
Financial Instruments ” . SFAS No. 155 amends SFAS No 133, “ Accounting for
Derivative Instruments and Hedging Activities ” , and SFAF No. 140, “ Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities ” . SFAS No. 155, permits fair value re-measurement for any hybrid
financial instrument that contains an embedded derivative that otherwise would
require bifurcation, clarifies which interest-only strips and principal-only
strips are not subject to the requirements of SFAS No. 133, establishes a
requirement to evaluate interest in securitized financial assets to identify
interests that are freestanding derivatives or that are hybrid financial
instruments that contain an embedded derivative requiring bifurcation, clarifies
that concentrations of credit risk in the form of subordination are not embedded
derivatives, and amends SFAS No. 140 to eliminate the prohibition on the
qualifying special-purpose entity from holding a derivative financial instrument
that pertains to a beneficial interest other than another derivative financial
instrument. This statement is effective for all financial instruments acquired
or issued after the beginning of the Company ’ s first fiscal year that begins
after September 15, 2006.  Management
believes that this statement will not have a significant impact on the
consolidated financial statements.
  In March
2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial
Assets ” ( “FAS 156 ”), which amends SFAS No. 140. FAS 156 specifically provides
guidance addressing the recognition and measurement of separately recognized
servicing assets and liabilities, common with mortgage securitization
activities, and provides an approach to simplify efforts to obtain hedge
accounting treatment. FAS 156 is effective for all separately recognized
servicing assets and liabilities acquired or issued after the beginning of an
entity ’s fiscal year that begins after September 15, 2006, with early adoption
being permitted. This statement is effective as of the beginning of the Company
’ s first fiscal year that begins after September 15, 2006. Management believes
that this statement will not have a significant impact on the consolidated
financial statements.
  
  F-11
 
 CHINA YINGXIA INTERNATIONAL
INC.
 (FORMERLY AGRONIX,
INC.)
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
 DECEMER 31,
2006
 
   2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
   In July
2006, the FASB issued FIN 48, Accounting for Uncertainty in Income Taxes—an
Interpretation of FASB Statement No. 109, which clarifies the accounting for
uncertainty in tax positions. This Interpretation requires that the Company
recognizes in its consolidated financial statements the impact of a tax position
if that position is more likely than not of being sustained on audit, based on
the technical merits of the position. The provisions of FIN 48 are effective for
the Company on January 1, 2007, with the cumulative effect of the change in
accounting principle, if any, recorded as an adjustment to opening retained
earnings. The Company is currently evaluating the impact of adopting FIN 48 on
its consolidated financial statements.
   In
September 2006, the FASB issued SFAS 157, Fair Value Measurements, which defines
fair value , establishes a framework for measuring fair value in generally
accepted accounting principles, and expands disclosures about fair value
measurements. SFAS 157 applies under other accounting pronouncements that
require or permit fair value measurements, where fair value is the relevant
measurement attribute. SFAS 157 is effective for financial statements issued for
fiscal years beginning after November 15, 2007, and interim periods within those
fiscal years. The management of the Company is currently evaluating the impact
of adopting SFAS 157 on its consolidated financial statements.
   In
September 2006, the SEC issued SAB No. 108, which provides guidance on the
process of quantifying financial statement misstatements. In SAB No. 108, the
SEC staff establishes an approach that requires quantification of financial
statement errors, under both the iron-curtain and the roll-over methods, based
on the effects of the error on each of the Company’s financial statements and
the related financial statement disclosures. SAB No.108 is generally effective
for annual financial statements in the first fiscal year ending after November
15, 2006. The transition provisions of SAB No. 108 permits existing public
companies to record the cumulative effect in the first year ending after
November 15, 2006 by recording correcting adjustments to the carrying values of
assets and liabilities as of the beginning of that year with the offsetting
adjustment recorded to the opening balance of retained earnings. Management does
not expect that the adoption of SAB No.108 would have a material effect on the
Company’s consolidated financial statements.
  3. INVENTORY
 Packing
      Materials
                  
                  $
                  97,910Finished
      Goods
                  
                  
                  1,014,192Total
                  
                  $
                  1,112,102
 
  No
allowance for inventory was made for the year ended December 31,
2006.
 
 F-12
 
 CHINA YINGXIA INTERNATIONAL
INC.
 (FORMERLY AGRONIX,
INC.)
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
 DECEMER 31, 2006
 
 
 4. PROPERTY, PLANT AND EQUIPMENT,
NET
 
 Property,
plant and equipment consist of the following at December 31, 2006:
 
 Machinery
      & Equipment
                  
                  $
                  2,408,497Automobiles
                  
                  
                  316,046Cactus
      Seedlings
                  
                  
                  6,135,956Sub
      total
                  
                  
                  8,860,499Less:
      Accumulated Depreciation
                  
                  
                  (2,381,268
                  )Construction
      in progress
                  
                  
                  8,511,363Total
      property, plant & Equipment, net
                  
                  $
                  14,990,594
 
 Depreciation
expense for the years ended December 31, 2006 and 2005 was $ 536,805 and
$312,432, respectively
 The
capitalized costs of the cactus seedlings include the costs paid for the cactus
seeds, costs of land preparation and costs of setting up the greenhouse
including the materials and labor. Once the seedlings start producing,
maintenance costs, depreciation of the plants, and allocatd overhead costs such
as the heating costs for the greenhouse,  are charged to costs of the
goods sold once incurred.
 Construction
in progress represents direct costs of construction or acquisition and design
fees incurred for the Company’s new plant and new office building project. All
construction costs associated with this project are accumulated and capitalized
as construction in progress. The construction in progress is closed out to the
appropriate asset classification when the project is substantially complete,
occupied, or placed into services. No depreciation is provided until it is
completed and ready for its intended use. For the years ended December 31, 2006
the costs involved with construction in progress amounted to $8,511,363.
 
 5. OTHER
RECEIVABLES
 
 Other
receivables represent cash advances to employees and sales representatives for
normal business purposes. Other receivables, net of an allowance of $271,607,
for the year ended December 31, 2006 were $346,775.
 
 6. RELATED PARTY
LOANS
  As of
December 31, 2006, the Company has loans receivable from related parties in the
amount of $ 2,764,599. All related party loans are provided to the affiliated
retail stores or companies to facilitate the initial establishment of their
businesses for selling the Company’s products. These loans are interest free and
unsecured and have no fixed repayment dates. All these loans are expected to be
fully repaid upon demand.
 The
management of the Company has been making the efforts to collect these loans. As
of the date of this report, $922,592 has been collected and the remaining
balance is expected to be fully repaid by the end of the second quarter of 2007.
No allowance is considered necessary at this time.
 F-13
  CHINA YINGXIA INTERNATIONAL
INC.
 (FORMERLY AGRONIX,
INC.)
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
 DECEMER 31, 2006
 
 
 7. LAND USE RIGHT
 
 All land
in the People’s Republic of China is government owned and can not be sold to any
individual or company. However, the government grants the user a “land use
right” (the Right) to use the land. The Company acquired land use rights during
2005 for the amount of $300,081 but did not receive the land use certificate
until 2006. The Company has the right to use the land for 50 years and amortized
the Right on a straight line basis of the 50 years.
  Amortization
expense for the years ended December 31, 2006 and 2005 was $6,002 and - 0 -,
respectively.
 8. INCOME TAXES
 
 The
Company is governed by the Income Tax Law of the People’s Republic of China
concerning the private-run enterprises, which are generally subject to tax at a
statutory rate of 33% (30% state income tax plus 3% local income tax) on income
reported in the statutory financial statements after appropriated tax
adjustments. In 2006, the Company has obtained its foreign-owned entity (“WOFE”)
status upon completion of the reverse acquisition.
 
 According
to the Provisional Regulations of the People ’ s Republic of China on Income
Tax, the Document of Reductions and Exemptions of Income Tax for the Company has
been approved by the local tax bureau and the Management Regulation of Harbin
Economic and Technological Development Zone for the reporting period. The
Company was granted the status of WOFE and therefore is exempt from income tax
from January 1, 2004 through December 31, 2007. The Company has also been
approved to have its tax rate reduced by 50% from January 1, 2008 to December
31, 2010.
  The
estimated tax savings due to the tax holidays for the year ended December 31,
2006 and 2005 amounted to $772,022 and $893,907. Te net effect on earnings per
share had the income tax applied would decrease earnings per share from $0.33 to
$0.27 in 2006 and $0.73to $0.49 in 2005.
  The
Company has recognized the previously accrued income taxes in the amount of
$3,000,795 as income tax benefits in the Statement of Income for the year ended
December 31, 2006.
 
 The
following table reconciles the U.S. statutory rates to the Company’s effective
tax rate for the year ended December 31, 2006:
  U.S.
      Statutory rates
                  
                  
                  34
                  %Foreign
      income not recognized in USA
                  
                  
                  (34
                  %)China
      income taxes
                  
                  
                  -
      0 -Income
      tax benefit recognized
                  
                  
                  (3,000,795
                  )Total
      income taxes provision (benefit)
                  
                  $
                  (3,000,795
                  )
    F-14
  CHINA YINGXIA INTERNATIONAL
INC.
 (FORMERLY AGRONIX,
INC.)
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
 DECEMER 31, 2006
 
 
 9. STATUTORY
RESERVES
 
 Pursuant
to the laws of People’s Republic of China, the Company is required to maintain
certain statutory reserves by appropriating from its after-tax profit before
declaration or payment of dividends. The statutory reserves include surplus
reserve fund, common welfare fund and the enterprise fund. These statutory
reserves represent restricted retained earnings.
 
 Surplus reserve
fund
 
 The
Company is generally required to transfer 10% of its net income, as determined
under PRC accounting rules and regulations, to a statutory surplus reserve fund
until such reserve balance reaches 50% of the Company’s registered capital.
However, the laws exclude the companies owned by foreign entities. The Company’s
operating subsidiary, Harbin Yingxia, became a foreign owned entity in 2006 upon
acquisition by the Company. Therefore, it is exempted from making any more
mandatory reserves. It is at the management’s discretion whether to make any
additional reserves. For the year ended December 31, 2006, the Company elected
to make $31,540 to this reserve.
 
 The
surplus reserve fund is non-distributable other than during liquidation and can
be used to fund previous years ’ losses, if any, and may be utilized for
business expansion or converted into share capital by issuing new shares to
existing shareholders in proportion to their shareholding or by increasing the
par value of the shares currently held by them, provided that the remaining
reserve balance after such issue is not less than 25% of the registered
capital.
 
 Common welfare
fund
 
 The
Company is required to transfer 5% to 10% of its net income, as determined in
accordance with the PRC accounting rules and regulations, to the statutory
common welfare fund. Making any additional common welfare reserve becomes
voluntary for the Company because its foreign entity status. For the year ended
December 31, 2006, the Company elected to make $15,770 to this reserve.
 
 This fund
can only be utilized on capital items for the collective benefit of the Company
’ s employees, such as construction of dormitories, cafeteria facilities, and
other staff welfare facilities. This fund is non-distributable other than upon
liquidation.
 
 Enterprise
fund
 
 The
enterprise fund may be used to acquire fixed assets or to increase the working
capital to expend on production and operation of the business. No minimum
contribution is required and the company did not make any contribution to this
fund during 2006.
 
 F-15
 
 CHINA YINGXIA INTERNATIONAL
INC.
 (FORMERLY AGRONIX,
INC.)
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
 DECEMER 31, 2006
 
 
 9. STATUTORY RESERVES
(Continued)
 
 The
following represents the accumulated balances of the appropriations as of
December 31, 2006:
  Surplus
      Reserve
                  
                  $
                  600,975Common
      Welfare Reserve
                  
                  
                  300,488Total
                  
                  $
                  901,463
   10. SEGMENT
INFORMATION
 
 The
Company has five different operating segments. Summarized financial information
concerning the Company’s revenues from its external customers for each of the
product categories for the year ended December 31, 2006 are as
follows:
  Green
      Food Products
                    
                    $
                    457,844Dietary
      Supplements
                    
                    
                    1,251,103Cosmetic
      Products
                    
                    
                    69,132Cactus-based
      powders and herbal supplements
                    
                    
                    6,286,883Others
                    
                    
                    336,749Total
                    
                    $
                    8,401,711
 
 Majority
of the Company’s revenue were generated in China, which accounts for
approximately 99.5% of the Company’s total revenue. Our sales in foreign nations
represent pilot programs that as of yet have not become full-scale
operations.
   11.STOCKHOLDERS’
EQUITY
  Upon the
completion of the reverse acquisition on May 12, 2006, the Company had
93,003,153 outstanding  shares of Common Stock, 1,473,469 shares of
Class A Preferred Stock, of which each share is convertible into five hundred
(500) shares of common stock.
  On May
26, 2006, the Company's board of directors had proposed a 1 to 24.9 reverse
stock split on both the common stock and preferred stock, subject to shareholder
approval. On July 21, 2006, the proposal was approved by the Company's
shareholders, each 24.9 shares of the Company's Common Stock and Class A
Preferred Stock were converted into one (1) share of Common Stock and one (1)
share of Class A Preferred Stock, respectively. Simultaneously, all of the
preferred shares were converted into common shares and the preferred shares were
cancelled. As of December 31, 2006, there are 33,608,857 shares of common stock
outstanding and no preferred stock.  There were no other shares issued
in 2006.
   F-16
 CHINA YINGXIA INTERNATIONAL
INC.
 (FORMERLY AGRONIX,
INC.)
 NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Continued)
 DECEMER 31, 2006
 
 
 12. COMMITMENTS AND
CONTINGENCIES
  The
Company ’ s operations are carried out in the PRC. Accordingly, the Company ’ s
business, financial condition and results of operations may be influenced by the
political, economic and legal environments in the PRC, and by the general state
of the PRC ’ s economy.
 
 The
Company ’ s operations in the PRC are subject to specific considerations and
significant risks not typically associated with companies in the North America
and Western Europe. These include risks associated with, among others, the
political, economic and legal environments and foreign currency exchange. The
Company ’ s results may be adversely affected by changes in governmental
policies with respect to laws and regulations, anti-inflationary measures,
currency conversion and remittance abroad, and rates and methods of taxation,
among other things.
 The
Company’s sales, purchases and expenses transactions are denominated in RMB and
all of the Company’s assets and liabilities are also denominated in RMB. The RMB
is not freely convertible into foreign currencies under the current law. In
China, foreign exchange transactions are required by law to be transacted only
by authorized financial institutions at exchange rates set by the People’s Bank
of China, the central bank of China. Remittances in currencies other than RMB
may require certain supporting documentation in order to affect the
remittance.
 
 13. SUBSEQUENT
EVENTS
 
 On
February 3, 2007, the Company entered into an exclusive agreement with Chinese
Agricultural Academy of Science (“CAAS”) to develop a new variety of rice grains
with low glucose aimed to help people with diabetes. CAAS agrees to transfer its
patented know-how to the Company for approximately $640,000 and to work with the
Company to select suitable places for planting and to provide technical
assistances. The project is currently in progress as planned.


F-17


CHINA
YINGXIA INTERNATIONAL, INC.
 (PARENT-ONLY)
 
 FINANCIAL
STATEMENTS
 
 DECEMBER
31, 2006
 
 
 
     F-18
  
 
 CHINA
YINGXIA INTERNATIONAL, INC.
 (PARENT-ONLY)
 
 INDEX
TO CONDENSED FINANCIAL STATEMENTS
 
 
 Condensed
      Balance Sheet at December 31, 2006
              F-20Condensed
      Statements of Operations for the years ended December 31, 2006 and
      2005
              F-21Condensed
      Statements of Changes in Stockholders’ Equity for the years ended December
      31, 2006 and 2005
              F-22Condensed
      Statements of Cash Flows for the years ended December 31, 2006 and
      2005
              F-23Notes
      to Condensed Financial Statements
              F-24
      - F-26




F-19


CHINA
YINGIXA INTERNATIONAL INC.


(PARENT-ONLY)


CONDENSED
BALANCE SHEET
 December
31, 2006





ASSETSInvestment
      in Subsidiary
            
            $
            33,609Total
      Assets
            
            $
            33,609LIABILITIES
      AND STOCKHOLDERS' EQUITYTotal
      Liabilities
            
            
            -Stockholders'
      Equity:Preferred
      stock, $0.001 par value, 10,000,000 shares authorized; - 0
      -shares
      outstanding at December 31, 2006Common
      stock, $0.001 par value, 100,000,000 shares
authorized;33,608,857
      shares issued and outstanding as of December 31, 2006
            
            
            33,609Additional
      paid-in-capital
            
            
            -Retained
      earnings-unappropriated
            
            
            -Total
      Stockholders' Equity
            
            
            33,609Total
      Liabilities and Stockholders' Equity
            
            $
            33,609





F-20


CHINA
YINGIXA INTERNATIONAL INC.


(PARENT-ONLY)


CONDENSED
STATEMENTS OF OPERATIONS


FOR
THE YEARS ENDED DECEMBER 31,




2006
            
            
            2005Revenues
            
            $
            -
            
            
            $
            -Cost
      of Goods Sold
            
            
            -
            
            
            
            -Gross
      Profit
            
            
            -
            
            
            
            -Operating
      ExpensesSelling,
      general and administrative
            
            
            61,527
            
            
            
            715,246Income
      before other Income and (Expenses)
            
            
            (61,527
            )
            
            
            (715,246
            )Other
      Income and (Expenses)Interest
      Income
            
            
            2
            
            
            
            12Gain
      on settlement of debt
            
            
            95,952Income
      (loss) Before Income Taxes (Benefits)
            
            
            34,427
            
            
            
            (715,234
            )Provision
      for Income Taxes (Benefits)
            
            
            -
            
            
            
            -Net
      Income (loss)
            
            $
            34,427
            
            
            $
            (715,234
            )Basic
      and diluted income per common share
            
            $
            0.00
            
            
            $
            (0.02
            )Weighted
      average number of common shares
            
            
            17,157,810
            
            
            
            41,936,000





F-21




CHINA
YINGXIA INTERNATIONAL INC.


(PARENT-ONLY)


CONDENSED
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
 FOR
THE YEARS ENDED DECEMBER 31, 2006 AND 2005




RetainedPreferred
      Stock
            
            
            Common
      Stock
            
            
            
            
            
            Earningspar
      value $0.001
            
            
            par
      value $.001
            
            
            Additional
            
            
            (AccumulatedShares
            
            
            Amount
            
            
            Shares
            
            
            Amount
            
            
            Paid
      in Capital
            
            
            Deficits)
            
            
            TotalBalance,
      January 1, 2005
            
            
            -
            
            
            $
            -
            
            
            
            38,191,197
            
            
            
            38,191
            
            
            $
            6,073,013
            
            
            $
            (6,464,993
            )
            
            $
            (353,789
            )Issuance
      of common stock
            
            
            
            
            
            
            
            
            
            
            6,996,847
            
            
            
            6,997
            
            
            
            334,198
            
            
            
            
            
            
            
            341,195Recapitalization
      on reverse acquision
            
            
            1,473,649
            
            
            
            1,473
            
            
            
            54,811,956
            
            
            
            54,812
            
            
            
            (56,285
            )
            
            
            
            
            
            
            -Reverse
      split (note 1) 24.9:1
            
            
            (1,414,466
            )
            
            
            (1,414
            )
            
            
            (95,983,936
            )
            
            
            (95,984
            )
            
            
            97,398
            
            
            
            
            
            
            
            -Net
      loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (715,234
            )
            
            
            (715,234
            )Balance,
      December 31, 2005
            
            
            59,183
            
            
            
            59
            
            
            
            4,016,064
            
            
            $
            4,016
            
            
            $
            6,448,324
            
            
            $
            (7,180,227
            )
            
            $
            (727,828
            )Covervsion
      of Preferred Stock (Note 1)
            
            
            (59,183
            )
            
            
            (59
            )
            
            
            29,592,793
            
            
            
            29,593
            
            
            
            (29,424
            )
            
            
            
            
            
            
            110-Net
      income from January 1, 2006 to May 12, 2006
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            34,427
            
            
            
            34,427-Effect
      of reverse acquisition occurred on May 12, 2006
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (6,418,900
            )
            
            
            7,145,800
            
            
            
            726,900Balance
      December 31, 2006
            
            
            -
            
            
            $
            -
            
            
            
            33,608,857
            
            
            $
            33,609
            
            
            $
            -
            
            
            $
            -
            
            
            $
            33,609





F-22




CHINA
YINGXIA INTERNATIONAL INC.


(PARENT-ONLY)
 CONDENSED
STATEMENTS OF CASH FLOWS


FOR
THE YEARS ENDED DECEMBER 31,


2006
              
              
              2005Cash
      Flows From Operating Activities:Net
      income (loss)
              $
              34,427
              
              
              $
              (715,234
              )Adjustments
      to reconcile net income (loss) to net cashprovided
      by (used in) operating activities:Depreciation
      and amortization
              
              88
              
              
              
              389Stock-based
      compensation
              
              
              
              
              
              88,750Consulting
      fees paid thorugh the issuance of common stocks
              
              -
              
              
              
              345,186Gain
      on settlement of debt
              
              (95,952
              )
              
              
              -Changes
      in operating assets and liabilities:Receivables
              
              9,121
              
              
              
              (5,470
              )Prepaid
      expenses
              
              38
              
              
              
              (407
              )Accounts
      payable and accrued liabilities
              
              53,734
              
              
              
              255,751Cash
      provided by (used in) operating activities
              
              1,456
              
              
              
              (31,035
              )Cash
      Flows From Investing Activities:Purchase
      of property and equipment
              
              -
              
              
              
              -Cash
      (used in) investing activities
              
              -
              
              
              
              -Cash
      Flows From Financing ActivitiesNet
      proceeds from issuance of common stock
              
              -
              
              
              
              28,225Payment
      to shareholders upon reverse merger
              
              (5,827
              )
              
              
              -Cash
      provided by (used in) financing activities
              
              (5,827
              )
              
              
              28,225Increase
      (Decrease) in cash and cash equivalents
              
              (4,371
              )
              
              
              (2,810
              )Cash
      and Cash Equivalents - Beginning of year
              
              4,371
              
              
              
              7,181Cash
      and Cash Equivalents - Ending of year
              $
              -
              
              
              $
              4,371Supplemental disclosures
      of cash flow informationDuring
      the year, cash was paid for the following:Interest
              
              -
              
              
              
              -Taxes
              $
              -
              
              
              $
              -Non-cash investing and
      financing activities:Share
      issued for settlement of debt
              $
              -
              
              
              $
              65,559Share
      issued for consulting services
              $
              -
              
              
              $
              186,541
  F-23
 CHINA
YINGXIA INTERNATIONAL INC.
 (PARENT-ONLY)
 NOTES
TO CONDENSED FINANCIAL STATEMENTS
 DECEMER
31, 2006
  
 1.  ORGANIZATION
AND BASIS OF PRESENTATION
 
 China
Yingxia International (the “Company” or “China Yingxia”) was incorporated in the
State of Florida on May 6, 1996 and formerly known as Agronix, Inc.
(“Agronix”).
  On May
12, 2006, the Company entered into a share exchange agreement with Warner
Nutraceutical International, Inc. (‘WNI”), which is the parent company to Harbin
Yingxia Business Group Co, Ltd. ("Yingxia"). Pursuant to the share exchange
agreement, the Company issued to WNI shareholders 54,811,475 shares of Common
Stock, par value $0.001 per share, and 1,473,649.074 shares of Class A Preferred
Stock, par value $0.001 per share, of which each share is convertible into five
hundred (500) shares of the Company’s Common Stock. As a result of the
transactions, there has been a change in control of the Company as the
shareholders of WNI became the majority shareholders of the
company.
  For
accounting purpose, the transaction has been accounted for as a reverse
acquisition under the purchase method. Accordingly, WNI and its subsidiary are
treated as the continuing entity for accounting purposes. Following the merger,
Agronix filed Certificate of Amendment and changed its name to China Yingxia
International, Inc.
  On
July 21, 2006, the company’s board of directors approved a reverse stock spilt
on both common stock and preferred stock.  Each 24.9 shares of the
Company's Common Stock and Class A Preferred Stock were converted into one (1)
share of Common Stock and one (1) share of Class A Preferred Stock,
respectively. Simultaneously, all of the preferred shares were converted into
common shares at ration of 1 to 500 and the preferred shares were cancelled. As
of December 31, 2006, there are 33,608,857 shares of Common Stock outstanding
and no Preferred Stock.
  The
Company operates its business through its wholly-owned subsidiary Harbin Yingxia
Business Group, Ltd. (" Harbin Yingxia"), a joint stock corporation organized
and existing under the laws of the People's Republic of China (“PRC”) in 1998.
Harbin Yingxia is engaged in the development, manufacture and distribution of
organic nutritional food products and dietary supplements. Relying on the raw
materials produced in the soybean production base, green cactus production base
and organic millet production base, Yingxia produces and distributes hundreds of
serial products of high quality, high nutrition, and high added
value.
   F-24
 CHINA
YINGXIA INTERNATIONAL INC.
 (PARENT-ONLY)
 NOTES
TO CONDENSED FINANCIAL STATEMENTS
 DECEMER
31, 2006
  
 1.  ORGANIZATION
AND BASIS OF PRESENTATION (Continued)
  The
Company’s condensed financial statements have been prepared in accordance with
generally accepted accounting principles in the United States of America (“US
GAAP”). The condensed financial statements of China Yingxia include the accounts
of the Company only.
  The
accompanying financial statements and footnotes have been condensed and
therefore do not contain all disclosures required by generally accepted
accounting principles. It is suggested that these condensed financial statements
be read in conjunction with the December 31, 2006 audited consolidated financial
statements and the accompanying notes thereto.
 
 2.   SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
 
 Use
of estimates
  In
preparing the financial statements in conformity with accounting principles
generally accepted in the United States of America, management makes estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the dates of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting year. Significant estimates, required by management, include the
recoverability of long-lived assets and the valuation of
inventories.  Actual results could differ from those
estimates.
 
 Cash
and cash equivalents
 
 For
purposes of the statement of cash flow, the Company considers all highly liquid
investments with an original maturity of three months or less to be cash
equivalents.
 
 Investment
in subsidiaries
 
 Investment
in subsidiary refers to the 100% shareholding in Warner Nutraceutical
International Inc., which the Company acquired through the reverse acquisition
on May 12, 2006.
 
 Stock-based
compensation
 
 Effective
January 1, 2007, the Company adopted the provisions of Financial Accounting
Standards Board Statement of Financial Accounting Standards (“SFAS”) No. 123(R),
“Share-Based Payments,” which establishes the accounting for employee
stock-based awards. Under the provisions of SFAS No. 123(R), stock-based
compensation is measured at the grant date, based on the calculated fair value
of the award. And it is recognized as an expense over the requisite employee
service period (generally the vesting period of the grant).
  F-25
 CHINA
YINGXIA INTERNATIONAL INC.
 (PARENT-ONLY)
 NOTES
TO CONDENSED FINANCIAL STATEMENTS
 DECEMER
31, 2006
  
 2.   SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
 
 The
Company measures compensation expense for its non-employee stock-based
compensation under the Financial Accounting Standards Board (FASB) Emerging
Issues Task Force (EITF) Issue No. 96-18, “Accounting for Equity Instruments
that are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services”.  The fair value of the option
issued is used to measure the transaction, as this is more reliable than the
fair value of the services received.  Fair value is measured as the
value of the Company’s common stock on the date that the commitment for
performance by the counterparty has been reached or the counterparty’s
performance is complete.  The fair value of the equity instrument is
charged directly to compensation expense and additional paid-in
capital.
  3. STOCKHOLDERS’
EQUITY
  Upon
the completion of the reverse acquisition on May 12, 2006, the Company had
93,,003,153 outstanding  shares of Common Stock, 1,473,469 shares of
Class A Preferred Stock, of which each share is convertible into five hundred
(500) shares of common stock.
  On May
26, 2006, the Company's board of directors had proposed a 1 to 24.9 reverse
stock split on both the common stock and preferred stock, subject to shareholder
approval. On July 21, 2006, the proposal was approved by the Company's
shareholders, each 24.9 shares of the Company's Common Stock and Class A
Preferred Stock were converted into one (1) share of Common Stock and one (1)
share of Class A Preferred Stock, respectively. Simultaneously, all of the
preferred shares were converted into common shares and the preferred shares were
cancelled. As of December 31, 2006, there are 33,608,857 shares of common stock
outstanding and no preferred stock.
   F-26




Item 8. Changes In and Disagreements With
Accountants on Accounting and Financial Disclosure.




As
reported in our Form 8-K filed May 19, 2006, effective as of May 19, 2006, we
dismissed Dale Matheson Carr-Hilton LaBonte (“DMCL”) as our independent
registered public accounting firm, and engaged Josephs, Levine & Company,
LLC (“BJL”) as our new independent registered public accounting firm. The change
in independent registered public accounting firm was not the result of any
disagreement with DMCL.


Item 8A. Controls and
Procedures.


Evaluation of Disclosure
Controls and Procedures





Under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure controls and procedures, as such term is defined
under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities
Exchange Act of 1934, as amended (Exchange Act), as of December 31, 2006. Based
on this evaluation, our principal executive officer and principal financial
officer have concluded that our disclosure controls and procedures are effective
to ensure that information required to be disclosed by us in the reports we file
or submit under the Exchange Act is recorded, processed, summarized, and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms and that our disclosure and controls are designed
to ensure that information required to be disclosed by us in the reports that we
file or submit under the Exchange Act is accumulated and communicated to our
management, including our principal executive officer and principal financial
officer, or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.





Changes in Internal
Controls





There
were no changes (including corrective actions with regard to significant
deficiencies or material weaknesses) in our internal controls over financial
reporting that occurred during the fiscal year ended December 31, 2006 that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.


Item 8B. Other
Information.


None.





PART
III




Item 9.
            Directors, Executive Officers,
      Promoters and Control Persons; Compliance with Section 16(a) of the
      Exchange Act.




The
following table sets forth the name, age and position of each of our executive
officers and directors as of March 30, 2007.





Name
            
            Age
            
            Position
            
            Date Appointed
      DirectorYingxia
      Jiao
            
            54
            
            President,
      Chief Executive Officer, Chief Financial Officer and
    Chairman
            
            May
      12, 2006Gerald
      Montiel
            
            60
            
            Director
            
            February
      8, 2007Dr.
      Zhaobo Wang
            
            51
            
            Director
            
            February
      8, 2007





Set forth
below is a brief description of the background and business experience of our
executive officers and directors for the past five years (and, in some
instances, for prior years).





Yingxia Jiao became
our Chief Executive Officer, Chief Financial Officer and Director upon
consummation of the Reverse Merger on May 12, 2006. She graduated from Harbin
University of Chinese Medicine in 1997 and is a certified nutritionist of
Heilongjiang province. She had many years experience in the medical field and
hospital management before she founded the Yingxia group in 1998. She still
serves as its President and CEO. Since October 2000, she has served as Vice
Chairman of the Senior Welfare Foundation of Heilongjiang. Since August 2002,
she has also served as the Vice Chairman of the Safe Food Association of
Heilongjiang. In addition, since June 2004, she has served as the Vice Chairman
of the Association of Corporate Management of Heilongjiang.





Gerald Montiel was
appointed as an independent Director on February 8, 2007 and serves on the
Nominating and Corporate Governance Committee, the Compensation Committee, and
as Chairman of the Audit Committee. Mr. Montiel  was the
founder and Chairman of the Board and Chief Executive Officer of Dickie Walker
Marine, Inc., a Nasdaq traded company, since inception in October 2000 until May
of 2006, and Chief Financial Officer since inception until February 2002. In
1987, Mr. Montiel co-founded Ashworth, Inc., a Nasdaq traded company, and served
as its President and Chief Executive Officer from its inception until 1995, and
as Chairman of the Board from its inception until his retirement from Ashworth
in 1998. Mr. Montiel graduated from Colorado State University with a Bachelor of
Arts with an emphasis in Marketing. He was recognized as its Honored Alumni of
the Year in 1994.





14


Dr. Zhaobo Wang was
appointed as an independent Director on February 8, 2007 and serves on the serve
on the Nominating and Corporate Governance Committee. Dr. Wang is a
distinguished educator with business experience. Dr. Wang has been a professor
of Operations Management/Business Statistics of Fairleigh Dickinson University
(FDU) since 1992. He established the Chinese American Business Institute at FDU
where he serves as the first director. Dr. Wang was elected as the first ever
Asian-American school board member of Edison Township. Dr. Wang received his
Ph.D. in Operations Management in 1992 and MBA in Management Information Systems
in1990 from Rutgers University.




Term of
Office




Our
directors are appointed for a one-year term to hold office until the next annual
general meeting of our shareholders or until removed from office in accordance
with our bylaws. Our officers are appointed by our board of directors and hold
office until removed by the board.





Audit
Committee





The
Company has an audit committee charter. The audit committee: (i) appoints the
Company's independent auditors and monitors the independence of the Company's
independent auditors; (ii) reviews the Company's policies and procedures on
maintaining its accounting records and the adequacy of its internal controls;
(iii) reviews management's implementation of recommendations made by the
independent auditors and internal auditors; (iv) considers and pre-approves the
range of audit and non-audit services performed by independent auditors and fees
for such services; and (v) reviews and votes on all transactions between the
Company and any of its officers, directors or other affiliates.





Gerald
Montiel serves as Chairman of the Audit Committee and is an independent
director.





Code of
Ethics





On May
12, 2006 pursuant to the Reverse Merger, we adopted a new Code of Ethics that
applies to our principal executive officer and principal financial officer. This
new Code of Ethics replaces the prior Code of Ethics adopted November 12, 2003
and is attached as Exhibit 14.1.





Significant
Employees





None.





Family
Relationships





No family
relationships exist among our directors or executive officers.





Involvement in Certain Legal
Proceedings




To our
knowledge, during
the past five years, none of our directors, executive officers, promoters,
control persons, or nominees has been:






•
              the
      subject of any bankruptcy petition filed by or against any business of
      which such person was a general partner or executive officer either at the
      time of the bankruptcy or within two years prior to that time;  •
              convicted
      in a criminal proceeding or is subject to a pending criminal proceeding
      (excluding traffic violations and other minor offenses);  •
              subject
      to any order, judgment, or decree, not subsequently reversed, suspended or
      vacated, of any court of competent jurisdiction, permanently or
      temporarily enjoining, barring, suspending or otherwise limiting his
      involvement in any type of business, securities or banking activities;
      or  •
              found
      by a court of competent jurisdiction (in a civil action), the Commission
      or the Commodity Futures Trading Commission to have violated a federal or
      state securities or commodities law.






15


Compliance with Section
16(a) of the Exchange Act




Section
16(a) of the Securities Exchange Act of 1934 requires the Company's officers and
directors, and persons who own more than 10 percent of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (SEC). Officers,
directors, and greater than 10 percent stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.





To the
Company's knowledge, based solely on a review of the copies of such reports
furnished to the Company, all reports under Section 16(a) required to be filed
by its officers and directors and greater than ten percent beneficial owners
were timely filed as of the date of this filing.


Item 10. Executive
Compensation.


Compensation of Executive
Officers




The
following summary compensation table sets forth in U.S. dollars all compensation
awarded to, earned by, or paid to the named executive officers paid by us during
the fiscal years ended December 31, 2006 and 2005 in all capacities for the
accounts of our executives, including the Chief Executive Officer (CEO) and
Chief Financial Officer (CFO):





SUMMARY COMPENSATION
TABLE


Name and Principal
      Position
              
              
              Year
              
              Salary
                ($)
              
              
              Bonus
                ($)
              
              
              Stock
Awards
                ($)
              
              
              Option
      Awards
                ($)
              
              
              Non-Equity Incentive Plan
      Compensation ($)
              
              
              Non-Qualified Deferred
      Compensation Earnings
                ($)
              
              
              All Other
      Compensation
                ($)
              Totals
                ($)Yingxia
      Jiao,(1)
              
              
              2006
              
              12,000
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              12,000Chief
      Executive Officer,
              
              
              2005
              
              10,000
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              10,000Chief
      Financial Officer,PresidentBrian
      Hauff,(2)
              
              
              2006
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              0Chief
      Executive Officer,
              
              
              2005
              
              118,958
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              
              
              0
              118,958Chief
      Financial Officer,President


(1)
            Ms.
      Jiao was appointed as our President, Chief Executive Officer and Chief
      Financial Officer on May 12, 2006 pursuant to the Reverse Merger. Prior to
      the Reverse Merger, she earned $10,000 as an officer of
      Yingxia.(2)
            Mr.
      Hauff resigned asPresident,
      Chief Executive Officer and Chief Financial Officer on May 12, 2006
      pursuant to the Reverse Merger.





Outstanding Equity Awards at Fiscal
Year-End Table. There
were no individual grants of stock options to purchase our common stock made to
the named executive officers in the Summary Compensation Table during the fiscal
year ended December 31, 2006, and the subsequent period up to the date of the
filing of this prospectus.




Employment
Agreements




None of
our executive officers have employment agreements.




16


Compensation of
Directors




For the
fiscal year ended December 31, 2006, we did not compensate our directors for
their services.




Subsequently,
on February 8, 2007 we entered into independent director agreements with Dr.
Wang and Mr. Montiel which set forth their duties as an independent director and
the terms of compensation. Pursuant to the terms of the agreement, the Company
agreed to pay to Dr. Wang and Mr. Montiel a fee of $1,500 and $3,000,
respectively, for each formal Board and Committee meeting in which the director
participates, either in person or by teleconference and an aggregate value of
$20,000 per annum in the form of restricted shares of the Company’s common
stock, calculated based on the average closing price per share for the five (5)
trading days preceding and including January 1 of such year.


Item 11. Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder
Matters.




The
following table sets forth certain information regarding the ownership of our
capital stock, as of March 30, 2007, for: (i) each director; (ii) each person
who is known to us to be the beneficial owner of more than 5% of our outstanding
common stock; (iii) each of our executive officers named in the Summary
Compensation Table; and (iv) all of our current executive officers and directors
of as a group. Except as otherwise indicated in the footnotes, all information
with respect to share ownership and voting and investment power has been
furnished to us by the persons listed. Except as otherwise indicated in the
footnotes, each person listed has sole voting power with respect to the shares
shown as beneficially owned.





Title of
      Class
            
            Name and Address of Beneficial
      Owner
            
            Amount and Nature of Beneficial
      Ownership
            
            Percent of Class(2)Common
      Stock
            
            Yingxia
      Jiao(1)
            
            15,848,800
            
            47.16%Common
      Stock
            
            Dr.
      Zhaobo Wang(1)
            
            --
            
            --Common
      Stock
            
            Gerald
      Montiel(1)
            
            --
            
            --Common
      Stock
            
            Lantin
      Deng(3)
            
            4,801,600
            
            14.29%Common
      Stock
            
            Fuling
      Jiao(4)
            
            2,216,000
            
            6.59%Common
    Stock
            
            All officers and directors as a
      group (3 in number)
            
            20,650,400
            
            61.45%





(1) The
person listed is an officer and/or director of the Company and the address for
each beneficial owner is Harbin Yingxia Industrial Co., Ltd, No.300, Xidazhi
Street Nangang, Harbin Heilongjiang  F4 150001.





(2) Based on
33,608,857 shares of Common Stock issued and outstanding as of March 30,
2007.





(3) The
address for this beneficial owner is Harbin Yingxia Industrial Co., Ltd, No.300,
Xidazhi Street Nangang, Harbin Heilongjiang  F4 150001.





(4) Fuling
Jiao is the father of Yingxia Jiao.


Item 12. Certain Relationships and Related
Transactions.


We issued
loans totaling $793,968 to related parties, Yingxia Jiao our CEO and CFO
($352,591) and her father Fulin Jiao ($441,377). These loans have been fully
repaid as of December 31, 2006.
  We also
issued loans totaling $2,764,599 to affiliates, Harbin Technology Trading Co.,
Ltd.($192,027), Harbin Luse Xianhe Scientific Development Co, Ltd.($256,275),
Yingxia Franchise Stores (individually owned) ($1,121,446), Heilongjiang
Zhonglong Medicine Group ($480,516), Other affiliates totalled ($714,335).


17
 
  Item 13. Exhibits.






Exhibit No.
            
            Title of
      Document
            
            Location2.1
            
            Agreement
      of Merger and Plan of Reorganization among Agronix, Inc., Agronix
      Acquisition Corp., and Warner Nutraceutical International, Inc.
            
            Incorporated
      by reference as Exhibit 10.1 to Form 8-K filed May 12,
  20063.1.1
            
            Articles
      of Incorporation
            
            Incorporated
      by reference to Form 10-SB filed May 17, 20003.1.2
            
            Amendment
      to Articles of Incorporation
            
            Incorporated
      by reference to Form 10-SB filed May 17, 20003.1.3
            
            Amendment
      to Articles of Incorporation
            
            Incorporated
      by reference to Form 10-KSB filed April 2, 20073.1.4
            
            Certificate
      of Designation of Class A Preferred Stock
            
            Incorporated
      by reference as Exhibit 10.1 to Form 8-K filed May 12,
  20063.2
            
            Bylaws
            
            Incorporated
      by reference to Form 10-SB filed May 17, 200010.1
            
            Subsidiary
      Purchase Agreement
            
            Incorporated
      by reference as Exhibit 10.2 to Form 8-K filed May 12,
  200614.1
            
            Code
      of Ethics
            
            Incorporated
      by reference to Form 10-KSB filed April 2, 200721.1
            
            Subsidiaries
            
            Incorporated
      by reference to Form 10-KSB filed April 2, 200731.1
            
            Certification
      of Chief Executive Officer Pursuant to Rule 13a-14(a) of the
      Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
            
            Filed
      herewith32.1
            
            Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
            
            Filed
      herewith





Item 14. Principal Accounting Fees and
Services.


Audit
Fees


For the
Company’s fiscal years ended December 31, 2006 and 2005, we were billed
approximately $50,000 and $21,000 for professional services rendered for the
audit and review of our financial statements filed with the Securities and
Exchange Commission for our years ended December 31, 2006 and 2005,
respectively.




Tax
Fees




For our
fiscal years ended December 31, 2006 and 2005, we were not billed for
professional services rendered for tax compliance, tax advice, and tax
planning.




All Other
Fees




The
Company did not incur any other fees related to services rendered by our
principal accountant for the fiscal years ended December 31, 2006 and
2005.






18





SIGNATURES




In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.




CHINA YINGXIA INTERNATIONAL,
      INC.Date:   April
      8, 2008
            By:
            /s/ Yingxia JiaoYINGXIA
      JIAOPresident,
      Chief Executive Officer,
              Chief
      Financial Officer




In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.





Name
            
            Title
            
            Date/s/ Yingxia Jiao
              
              YINGXIA
      JIAO
            
            President,
      Chief Executive Officer,

                Chief
      Financial Officer and Chairman
            
            April
      8, 2008/s/ Lixue
      Deng
              Lixue Deng
            
            Director
            
            April
      8, 2008/s/ Dr. Zhaobo Wang
              DR.
      ZHAOBO WANG
            
            Director
            
            April
      8, 2008








19